Skip to comments.Office Depot to close 400 U.S. stores, shares jump
Posted on 05/09/2014 9:53:18 AM PDT by Beave Meister
(Reuters) - Office Depot Inc (ODP.N) said it would close at least 400 stores in the United States over two years as it looks to consolidate operations after acquiring OfficeMax, and the company raised its forecast for full-year adjusted operating income.
Shares of Office Depot, which also reported better-than-expected quarterly results, rose as much as 20 percent in early trading. The stock was among the highest percentage gainers on the New York Stock Exchange on Tuesday.
"This stock looks to be a beat and raise story throughout 2014," Janney Capital Markets analyst David Strasser wrote in a note, implying Office Depot was being cautious in its forecast.
The closure of the 400 stores will start adding to profit in 2015 and is expected to lead to annual run-rate savings of at least $75 million by the end of 2016, Office Depot Chief Executive Roland Smith said.
Office Depot and rival Staples Inc (SPLS.O) have been struggling with declining sales in the United States as shoppers shift their office supply purchases to e-retailers, mass merchants and drugstores.
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Reminds me of a letter I wrote about BART sometime ago. BART announced they were running less trains in an effort to increase on time performance. In my letter I noted that when they ran no trains they would have a perfect system.
I could have predicted that. The stores are depressing and nearly empty except for a few days before school starts. The employees are treated horribly, worse than at other big-box retailers. My son, his stepsister, and their friends worked there. I can’t tell you how bad it was.
A few years ago I thought that two of those chains were going to merge until the FTC said “nyet”. I understand the idea of anti-trust for things that have high startup costs or take a long time to set up. I never understood why office supply retail, whose wares can be bought from a number of competitors, warranted such treatment.
In the past closing stores was a sign of failure. Now a days you close stores and your stock price increases?
Money for nothing and your chicks for free I guess.
We have both an Office Depot and an Office Max so I’m sure one of them will close. The big box business model for specialty items like office supplies is failing.
Staples will be next if the Post Office doesn’t bail them out. Big store with no employees. I only shop there now on line and have them deliver.
Online shopping is killing these office supply stores.
it's all about earnings per share. Drive it up, and people and analysts and buyers are happy. If this change makes the companies more viable into the future for shareholders, how would that be a bad thing?
Seriously, retail is dead. Everybody is buying everything online. I resisted for many years because I was older and set in my ways. But now I pretty much get everything delivered to my house with a mouseclick. Peanuts from Virginia. Computer parts from California. Shirts from Maine. Books delivered directly to my Kindle from up in the cloud (on clear days, I might have to hunt down a brick and mortar bookstore).
Yes, it's happening. I sit out in my yard and I see nothing but brown UPS trucks and white FedEx trucks cutting through my neighborhood. All laden with consumer goods people are purchasing online.
We still have a lot of people going to retail stores but we are rapidly reaching a tipping point.
Know what’s killing Office Depot? Office Depot’s prices.
This is the latest “idea” to boost stock prices.
Close facilities and stock price jumps 30%
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