Skip to footer

Staples closing 140 stores this year amid poor sales

Staples will close 140 of its underperforming North America stores this year as it faces stiff competition from mass retailers such as Wal-Mart and Amazon. Staples warned its sales could fall in the current quarter during a Wednesday sales call. 

|
Mike Blake/Reuters/File
A Staples store is shown in Encinitas, Calif. Staples will close about 140 stores this year amid poor North American sales.
  • By Devika Krishna Kumar Reuters

Staples Inc warned that its sales could fall in the current quarter as it sells fewer computers and core office supplies such as ink, toner and paper in North America amid stiff competition from online retailers and big-box chains.

Shares of the largest U.S. office supply retailer fell as much as 4 percent. The stock was among the most traded on the Nasdaq on Wednesday.

Staples has been spending heavily on advertising to promote itself as a seller of products other than traditional office supplies.

Sales in its North America retail business, under which it sells core office supplies as well as breakroom items and copy and print products, fell 6 percent in the second quarter.

The business accounted for about 43 percent of Staples' total sales in the quarter.

Chief Executive Ron Sargent said quarterly sales of computer and technology accessories fell in double-digit percentage terms. "These categories represent about 20 percent of our total retail sales mix and drove about two-thirds of our same-store sales decline during the second quarter," he said on a conference call.

North America same-store sales, excluding Staples.com, fell 5 percent.

The company, facing stiff competition from mass merchants such as Wal-Mart Stores Inc and online retailers such as Amazon.com Inc, has announced several promotions for the back-to-school season.

Under one of the offers, if a customer can find an item sold by Staples at a lower price elsewhere, the company will not only match that price but also offer a 10 percent discount.

Aggressive discounting weighed on Staples' gross margins, which fell to 25.2 percent from 25.5 percent.

"With the consumer remaining value-focused, promotional activity is likely to remain elevated again this holiday (shopping season)," JP Morgan analysts wrote in a note.

Staples said in March it would close 140 of its underperforming North America stores this year.

Of these, it closed 80 stores in the second quarter ended Aug. 2.

Earlier this month, smaller rival Office Depot Inc warned of weak sales this year as it struggles to arrest a decline in sales in its North American retail business.

Staples forecast a profit of 34-39 cents per share for the third quarter ending November. Analysts on average were expecting 37 cents per share, according to Thomson Reuters I/B/E/S.

Net income fell 20 percent to $81.9 million, or 13 cents per share, in the second quarter. Excluding items, the company earned 12 cents per share.

Total sales fell 1.8 percent to $5.22 billion.

Analysts on average had expected a profit of 11 cents per share and revenue of $5.16 billion.

Staples shares were down 1.8 percent at $11.41 in noon trading. Up to Tuesday's close, the stock had fallen by more than a quarter this year. 

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.
editor@csmonitor.com
Subscribe
Mark Sappenfield
Editor

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

Subscribe to insightful journalism

QR Code to Staples closing 140 stores this year amid poor sales
Read this article in
https://www.csmonitor.com/Business/Latest-News-Wires/2014/0822/Staples-closing-140-stores-this-year-amid-poor-sales
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe