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Office Depot plans to close at least 400 U.S. stores

By Associated Press

POSTED:
LAST UPDATED: 06:54 a.m. HST, May 06, 2014


BOCA RATON, Fla. >> Office Depot is planning to close at least 400 U.S. stores, as its merger with OfficeMax resulted in an overlap of retail locations that can be consolidated.

It's not known yet which Hawaii stores will be closed.

The combined company's financial results beat Wall Street estimates for the January-March quarter and it raised its full year forecast for operating income on Tuesday.

Its shares jumped 17 percent in morning trading.

The office supply retailer had 1,900 stores in the U.S. at the end of the first quarter, so the plans call for closing about 21 percent of them. Office Depot and OfficeMax Inc. completed their $1.2 billion deal last November.

Office Depot said it has not quantified the number of jobs that will be affected by the store closures but that it will look to place its best talent impacted by the store closings into new roles, wherever possible.

Chairman and CEO Roland Smith said in a statement that one of the company's goals this year was to improve how its stores are positioned in North America to meet customer demand better and ensure that it's well positioned in the markets it serves.

"The overlapping retail footprint resulting from the merger provides us with a unique opportunity to consolidate and optimize our store portfolio, while maintaining the retail presence necessary to serve our customer," Smith said.

Office Depot said Tuesday that it expects to close 150 U.S. stores this year, mostly in the fourth quarter. It closed 14 stores in the first quarter, a company spokeswoman said.

All of the store closures are anticipated to occur by the end of 2016.

The store closings are expected to result in at least $75 million in annual savings by 2016's end and add to earnings starting next year.

Office Depot, which is based in Boca Raton, Florida, said that it's still trying to determine expected working capital savings and costs related to the store closings.

The company also reported its first-quarter financial results on Tuesday, which include results from OfficeMax. The year-ago results do not include OfficeMax.

For the period ended March 29, Office Depot lost $109 million, or 21 cents per share. In the prior-year period it lost $17 million, or 6 cents per share. Removing merger-related expenses and other items, earnings were 7 cents per share. Analysts surveyed by FactSet expected earnings of 3 cents per share.

Revenue climbed to $4.35 billion from $2.72 billion. Pro forma revenue for the year-ago period was $4.48 billion. Analysts expected revenue of $4.27 billion.

The company raised its 2014 outlook for adjusted operating income to be at least $160 million from a prior view of at least $140 million.

Shares of Office Depot rose 70 cents, or 17 percent, to $4.87 in morning trading.






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soundofreason wrote:
No worries. I'm sure O'bama's got some of those shovel ready jobs waiting for ya.
on May 6,2014 | 07:06AM
pcman wrote:
Just another victim of Obama's policies and hypocrisy. Such companies need full time expert sales clerks, not just part cashiers. Full timers in such large companies will require health care in accordance with the ACA. Health care can cost up to 50% of an employee's compensation.
on May 6,2014 | 07:55AM
HD36 wrote:
It's not 100% Obama's fault even though he's created more debt than all the other presidents before him combined. Maybe 81%?
on May 6,2014 | 10:14AM
awahana wrote:
Politics have nothing to do with this.
Poor corporate management is poor corporate management.
I used to spends thousands more dollars at Office Depot, than CompUSA or Circuit City. I was an integrator for Hawaii Business Top 250.
Office Depot then changed their policies, and their product mix, and the beginning of the end was in sight. No more Purchase Orders from 'moi.' They needed to get a clue, and they failed.
I expect all the current OfficeMax locations here will be the ones affected. They are redundant.
How many of you even remember that when they first opened on Dillingham Blvd., the first few months, their sign said Office Club?
How many of you remember the original name of Lowe's in Waikele? What was it?
on May 6,2014 | 08:58AM
what wrote:
I liked Waikele Lowe's better when they were Eagle. They seemed friendlier back then. Has it really been so long?
on May 6,2014 | 11:44AM
localguy wrote:
I would not be slamming Office Depot just yet. Years ago I purchased two computer monitors, flat screens, from them. They were in the Sunday flyer, on sale, with a rebate. I mailed in the rebates and was surprised to get a letter from the rebate company saying their were no rebate funds, we are sorry, goodbye. What the frack? How is this possible? Within a week I received an envelope from Office Depot. They apologized for the rebate problem and gave me a check for the full two monitor rebates plus an extra 20% off store coupon, good on anything. I don't know about you but to me that is world class service. Perhaps you were the one without a clue?
on May 6,2014 | 12:52PM
what wrote:
Looks like the Office Depot, not OfficeMax, location in town is closing. Another article says Whole Foods announced they are opening at that location.
on May 6,2014 | 01:09PM
awahana wrote:
Politics have nothing to do with this.
Poor corporate management is poor corporate management.
I used to spends thousands more dollars at Office Depot, than CompUSA or Circuit City. I was an integrator for Hawaii Business Top 250.
Office Depot then changed their policies, and their product mix, and the beginning of the end was in sight. No more Purchase Orders from 'moi.' They needed to get a clue, and they failed.
I expect all the current OfficeMax locations here will be the ones affected. They are redundant.
How many of you even remember that when they first opened on Dillingham Blvd., the first few months, their sign said Office Club?
How many of you remember the original name of Lowe's in Waikele? What was it?
on May 6,2014 | 09:00AM
awahana wrote:
Politics have nothing to do with this.
Poor corporate management is poor corporate management.
I used to spends thousands more dollars at Office Depot, than CompUSA or Circuit City. I was an integrator for Hawaii Business Top 250.
Office Depot then changed their policies, and their product mix, and the beginning of the end was in sight. No more Purchase Orders from 'm-o-i.' They needed to get a clue, and they failed.
I expect all the current OfficeMax locations here will be the ones affected. They are redundant.
How many of you even remember that when they first opened on Dillingham Blvd., the first few months, their sign said Office Club?
How many of you remember the original name of Lowe's in Waikele? What was it?
on May 6,2014 | 09:01AM
localguy wrote:
So many clueless, products of the Nei's failing educational system blame Obama for everything. This proves how out of touch with the real world they are. Had they done their due diligence, they did not, they would have learned there is too many stores selling office related supplies, Office Depot, Office Max, Staples. By merging, Office Max & Depot can reduce overhead, rent, losing stores and be in better position to compete against Staples. Not to mention the digital age is reducing many of the products these stores used to sell. One reference on this is: http://www.businessinsider.com/death-of-office-supply-stores-2013-2 No wonder the Nei always ranks 45-50 out of the 50 states.
on May 6,2014 | 09:22AM
HD36 wrote:
What's happening now, and what's going to happen has been in the works for a long time. The old worn out saying, "kick the can down the road" is so old, that nobody believes that debt matters anymore. The problem is, we're running out of road, and the can is no longer a can, it's the size of a tank.
on May 6,2014 | 10:00AM
localguy wrote:
Is there a point to your post? Seems to be lost.
on May 6,2014 | 12:53PM
HD36 wrote:
The point, which is lost on you, is that the economy is collapsing.
on May 6,2014 | 04:24PM
localguy wrote:
HD36 - Clearly you are a product of the Nei's failing educational system. Only seeing gloom and doom every where you look. Whining "The sky is falling." Our economic stats are actually much better than during the 2008-12 financial crisis. Looks like you forgot about this, only looking at the Nei's economic stats. Might want to do your due diligence before posting. Might just surprise you. http://www.reuters.com/article/2014/05/06/us-usa-economy-growth-idUSBREA4508I20140506
on May 6,2014 | 06:14PM
HD36 wrote:
Six years into the illusionary recovery, propped up with over $3 trillion dollars of QE and we another chain closing stores in step with Staples, Office Depot, Radio Shack, Albertson's, Abercrombie and Fitch, Barnes and Nobles, JC Penny's, Toys R Us, Sears, Ruby Tuesdays, and Red lobter, inter alia. The primary reason is that $85 billion a month QE didn't flow into main street but got funneled into the hands of hedge fund managers, ( one who just bought the most expensive house in America this month at $147 million), and anyonelse with access to the cheap money. What they did was speculate, driving the stock market to all time highs, reinflating the housing market through hedge fund REITS, and making billions front running the Fed through the REPO market. Not only does the consumer market have the headwind of massive private debt deleveraging, it also has negative demographic factors as baby boomers focus more on retirement than going further into debt. I look for a pause in the QE taper and an eventual increase to $100 million a month as the illusion turns into a nightmare.
on May 6,2014 | 09:46AM
localguy wrote:
Is there a point to your very verbose post? Seems to be lost.
on May 6,2014 | 12:54PM
HD36 wrote:
You were saying they only went out of business because office supply stores needed to merge to become more profitable. I'm merely pointing out the fallacy of your argument in that you fail to see the forest in the trees.
on May 6,2014 | 04:26PM
localguy wrote:
HD36 - Clearly you are a product of the Nei's failing educational system. Only seeing gloom and doom every where you look. Whining "The sky is falling." Our economic stats are actually much better than during the 2008-12 financial crisis. Looks like you forgot about this, only looking at the Nei's economic stats. Might want to do your due diligence before posting. Might just surprise you. http://www.reuters.com/article/2014/05/06/us-usa-economy-growth-idUSBREA4508I20140506
on May 6,2014 | 06:15PM
Tahitigirl55 wrote:
Does Kamehameha School own the property? It sounds like another Windward Mall and rent increases. Or either the RAIL needs to come through where the Office Max are. We will see which ones they close in Hawaii.
on May 6,2014 | 11:56AM
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