Friday, October 31st9.8°C
23888
22501

Office Depot plans to close at least 400 stores in US by the end of 2016

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.

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 per cent 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 per cent 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 OfficeMaxe. 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 per cent, to $4.87 in morning trading.

The Canadian Press


Read more Business News

22970


Recent Trending




Today's Market
S&P TSX14576.74+118.05
S&P CDNX764.91-6.74
DJIA17337.73142.31
Nasdaq4618.248+52.11
S&P 5002011.29+16.64
CDN Dollar0.8872-0.0062
Gold1169.30-29.2999
Oil80.37-0.53
Lumber325.70+2.10
Natural Gas3.715+0.066

 
Okanagan Companies
Pacific Safety0.12+0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.19+0.04
Cantex0.045-0.015
Anavex Life Sciences0.185+0.0139
Metalex Ventures0.03-0.005
Russel Metals32.64+0.42
Copper Mountain Mining2.035+0.065
Colorado Resources0.125-0.015
ReliaBrand Inc0.015+0.003
Sunrise Resources Ltd0.05+0.025
Mission Ready Services0.3750.00

 



23630

FEATURED Property
20256123360 Turnbull Road
10085698 bedrooms
$599,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Empty nesting: financial issues

Now that the children have ‘left the nest’, it is a good time to step back and take stock of your financial situation. Being on your own will probably cut household costs to some extent, b...


Keep your haunted home safe

Eerie sounds, spooky lights and Jack-o’-lanterns aglow—extra efforts at Halloween will keep visitors coming back for both tricks and treats. However, to keep the fun going, it’s imp...


What I learned in China

Photo: ContributedI will never be an expert on China. It is just too big, too complex and too old with layers of history and meaning that would take several lifetimes to unravel. As I said to my hosts...

_








Member of BC Press Council


22632