Office Supplies Giant Staples to Shutter 225 Stores
Published By : 10 Mar 2014 | Published By : QYRESEARCH
Staples, a global leader in office supplies has recorded a higher volume of sales through its online stores. In view of these changing dynamics, the company plans to shut as many as 225 stores by the end of 2015 in North America. With this, the company projects that it will be able to cut costs to the tune of USD 500 million annually.
Officials from the company were reported to have said that the company now derives 50% of its total sales volumes from its online stores. The company now aims to become more efficient by cutting costs and moving a step higher on the efficiency ladder.
Before the markets opened for the week, the stocks of Staples saw a 10% fall. The office supplies industry saw heavy damage from the recent recession, and it now under mounting pressure from discount stores and online retailers alike.
The market should expect more consolidation in the coming years. Indications of this are clear with rival office supplies companies OfficeMax and Office Depot completing a USD 1.2 billion merger recently.
There are several other factors that impact the business of such ‘big box’ companies, such as their overhead costs. Staples, too, shares these problems with its contemporaries.
According to news reports, the company currently runs around 2,200 stores across the world. The 225 stores being shut down amount to 10% of all Staples stores worldwide.
However, the company is yet to provide clarity on which locations will be closed down for business and how many consequent job losses will occur. The problems of the store are compounded by the fact that the fourth-quarter earnings of the company also saw a sharp decline.