Staples closing...

[matai]

...225 stores across North America including 40 in Canada after recording 10% less sales than usually last year.

More details soon I guess.

[oneh2obabe]

Staples will close up to 225 stores in North America by the end of next year as half of its sales have moved online.

The largest U.S. office-supply retailer said Thursday that it seeks to trim about $500 million in costs annually by 2015 and it plans to aggressively cut costs to become more efficient.

Company shares dropped more than 10 per cent before markets opened and at mid-morning was trading at $11.41 US, down 15 per cent.

The recession did heavy damage to the industry, which is now under increasing pressure from online retailers as well as discount stores.

There is rapid consolidation under way and rivals Office Depot and OfficeMax just completed a $1.2 billion merger.

But the overhead costs of running 'big box" stores has put companies like Staples under stress. Staples has closed dozens of stores in the past year.

The closings amount to 10 per cent of all Staples locations. The company has 2,200 stores worldwide, 1,846 of them in the United States and Canada.

Staples would not elaborate on the number of jobs that are being cut, nor the locations of stores that will close.

Chairman and CEO Ron Sargent said Thursday that his company wasn't giving up on brick-and-mortar stores, believing that customers still want the convenience and service that they can get there.

"That said, stores have to earn the right to stay open," Sargent said. "We are committed to making tough calls when it's necessary."

Staples also posted fourth-quarter earnings today and reported its sales fell sharply.

The company's earnings nearly tripled, but that is compared to a period when it booked $176.6 million in restructuring charges as it closed stores.

Staples earned $212.4 million US, or 33 cents per share, in the quarter that ended Feb. 1. That compares with earnings of $78.1 million US, or 12 cents per share, the previous year.

Revenue slumped nearly 11 per cent to $5.87 billion.

Sargent said no one is happy with the company's performance.

"It's clear we underestimated the headwinds we are facing in our retail stores as well as demand for core office supplies," he said.

Both revenue and profit fell short of Wall Street expectations, as did the company's outlook for this quarter.

Staples expects sales to fall again and it projected earnings of between 17 and 22 cents per share. Analysts that follow the company had been looking for something closer to 27 cents per share.

Staples shares fell $1.35 to $12.05 in premarket trading. That price would set a new 52-week low during regular trading.

http://www.cbc.ca/news/business/staples ... -1.2562302

[Symbonite]

http://www.cbc.ca/news/business/staples ... -1.2562302

What are the chances that this one is going like the Futureshop.

Also nothing to do with us, but something interesting happening in the states.

http://www.bloomberg.com/news/2014-03-0 ... tores.html

[GordonH]

Retail is indicating that thing are not as good as some may think.

[rekabis]

I’m thinking the West Kelowna branch of Staples will go bye-bye almost for sure. The entire westside simply doesn’t have the volume of residents (and I’m including Peachland here) to match the number of residents that Kelowna (by itself) had when Staples first came to Kelowna.

That entire set of strip malls will be slowly emptying out over the next half a decade. The numbers just don’t support them.

[NAB]

We'll probably see much more of this kind of thing - big business and small business provincially and nationally. That's what happens when government and business forgets that the consumer is King,.... and that the "consumer" collectively is far smarter than any government, politician, lobbyist, back room functionary, or business mogul gives them credit for. Just much slower to collectively react.

Nab

[Captain Awesome]

They've been on life support for some time. Stock prices and revenue just kept going down.

Hmm, might be some good deals there before they close.

[delSol97]

I laughed when I first saw that Staples store in WK. The Kelowna location is a ghost town most of the time. I can't see how that location could turn a profit.

[twobits]

The entire westside simply doesn’t have the volume of residents (and I’m including Peachland here) to match the number of residents that Kelowna (by itself) had when Staples first came to Kelowna.

That entire set of strip malls will be slowly emptying out over the next half a decade. The numbers just don’t support them.

It will be interesting to see what happens there. Millions of dollars invested on native lands will likely end up as a commercial ghost town. I am surprised the party lasted as long as it did and anyone considering investing in the Penticton Indian Band's Channel Crossing commercial development would be well advised to pay attention. What is unfolding in West Kelowna will be a case study for MBA programs in the future.

[Fancy]

Last time I was at the Westbank Staples there were 2 people behind the cash - no one else.

[Randall T]

Don't forget about online shopping. Take that away and the traffic in stores would be much higher. Staples, as many others, have an excellent online service. I rarely walk into a store anymore to purchase merchandise. Order online and it shows up at your door usually within a day or two. Shutting down stores and enhancing the online service is a smart move. The cost of running a box is an expense many corporations can do without. Online shopping is a reality and there will be many more closures in the future. I've found shopping in the valley is, on most counts, an exercise in frustration. Wasting a day driving around from store to store and hearing "we are out of stock but can order it in for you" motivates me to spend a few minutes on my computer and have the item delivered to me. Inventory ties up capital but it's also necessary to secure business in order to survive. Smart retailers either provide shoppers what they need in their stores, develop a good online service, or both. The world of retail is changing very quickly.

[Bsuds]

A few years ago Staples had a GPS unit on sale. I went to the Kelowna store and they were out of stock but they checked and the WB store had some and I could either drive there or they would bring it in for me.
I went home and ordered it online and it arrived the next morning at my door at 9am! Free shipping too.

[samsquench07]

Yeah, with fast shipping like that, store like that are heading in that direction to. As time goes on, and more people get comfortable shopping online, store like staples will disappear.

[LoneWolf_53]

Last time I was at the Westbank Staples there were 2 people behind the cash - no one else.

That sounds like the old Office Depot, where each time I went in there were about six employees and two customers.

I wasn't shocked to see it disappear either.

[hobbyguy]

Online shopping has to really hurt a retailer who sells a lot of small stuff. So much of it can be had online and cheaper.http://www.emarketer.com/Article/Ecommerce-Sales-Topped-1-Trillion-First-Time-2012/1009649

Part of the issue is that if you buy offshore or stateside, and it comes by mail (assuming you are willing to wait) - no HST or PST+GST. To make matters worse, many online sellers out of Singapore, Hong Kong, China et al very often mark purchases as "gifts". That puts a licensed retailer behind the 8 ball. They have higher overhead to start with, and now they are 12% less competitive - which is often more than the shipping costs. (Especially out of China where postal rates for exporters are subsidized.)

Best Buy complains about "show rooming", where folks check the article in their store and then buy elsewhere online. But I know in the case of a microphone I bought, their "sale" price was 50% higher than I paid online.

The other thing that happens is that being big and bureaucratic corporate entities, there is no customer loyalty. I personally will pay a little extra to deal with an independent retailer, but when it comes to the "big guys" - nope, if I can save a few bucks online, I do.

Part of the online phenomenon that corporate entities can't seem to deal with is that folks generally expect to pay less when they shop online. There is a discount for waiting as there are so many more vendors, not the least of which is Amazon (more so in the US than in Canada). If Staples drops their online price to compete, then they are undercutting their own stores.

With online shopping growing by 12-13% per year, they are really getting into a bind.

The question is, what does that do to the employment picture? There are a lot of retail jobs out there. Not all of them are at risk - for example, you can't feasibly buy a sheet of plywood online. But a lot are.