Skip to comments.OfficeMax Closing 110 U.S. Retail Stores
Posted on 01/10/2006 11:33:12 AM PST by Extremely Extreme Extremist
(AP) ITASCA, Ill. OfficeMax Inc., the nation's No. 3 office supplies retailer, said Tuesday it will shut down 110 of its approximately 950 U.S. retail stores in the first quarter as part of a restructuring aimed at strengthening its business.
The company also said it will close its wood-polymer building materials plant in Elma, Wash., and make other moves as part of a shake-up that will result in $187 million in pretax charges.
OfficeMax did not disclose the locations of the stores targeted for closure by the end of March or how many jobs would be affected. The company will be notifying the stores involved over the next week, spokesman Bill Bonner said.
In a regulatory filing, it indicated that all the stores to be closed are superstores, which comprise the vast majority of its stores. It also plans to close five retail stores in Canada.
OfficeMax still intends to open 70 new stores this year and expects to have 887 domestic retail stores at the end of this year.
The company has been struggling to keep up with bigger competitors Staples Inc. and Office Depot Inc. and also has suffered from internal problems. Its largest shareholder, K Capital Partners LLC, demanded in November that the board of directors take immediate steps to improve its "dismal" financial and operating performance.
Sam Duncan, chairman and chief executive officer since last year, called the closings "a difficult but necessary step toward improving our company's overall performance." He said it resulted from an assessment last year of each store's results and growth potential.
The company said it plans to record pretax costs of about $141 million for the domestic store closings, roughly $41 million for exiting the building materials business, and about $5 million for restructuring its overseas operations.
About $141 million of the total charges will be incurred in this year's first quarter, while the balance was recorded in last year's fourth quarter, OfficeMax said.
OfficeMax began introducing a new store format recently that signals a shift away from the warehouse-style stores that are the industry standard, including boutique-like shopping areas, soft lighting and a cafe.
Shares in the company fell 3 cents to $26.50 in morning trading on the New York Stock Exchange. The stock dropped 19 percent in 2005.
"By law, there should be at least one Fry's Electronics in every city or large town and they must be open 24/7."
There ya go. Getcher computer junk, snack food, and porn DVDs all in the same place. Ideal situation all around, eh?
I like the latest Staples add with the tearing of reality. The girl has incredible... brains.
I never have understood the concept of four different companies selling the same product on the four corners of the same intersection. e.g. gas stations, burger joints.
And we remember the ad, which is what advertising is about.
There are only 5 Office Maxes in the Houston metro area. That's about one store per million residents. Hope they don't close here.
My company uses OM, which was recently purchased by Boise Office Products, a division of Boise-Cascade. Must be their consultants that are pushing this through.
These stores are great for businesses because they deliver and you can order today and get it tomorrow, if not today.
That's pretty cheap shipping to Uruguay.
In addition to only having 5 OMs for the entire Houston Area, we don't have Staples. That leaves the field to Office Depot.
Office Depot delivers too, but traffic in Corpus Christi isn't anything like the traffic in Houston so there's not much of advantage over going to the store yourself. Often we'll buy office supplies after lunch or after work.
For things like gas stations and burger joints it's capitalizing on traffic flow. It's easier to pull out of someplace on the far side of the intersection (defined by your travel path) than the near side. So what they're hoping is that you'll see the near gas station think "oh yeah I need gas" and then before you pull in notice the gas station on the other side and use them. Doesn't really work so well for bigger stores like OfficeMax though.
I never figured that out either. I travel a lot and it is that way in every city.
I Pity The Mom & Pop Office Supply stores! ! ! ! ! !
If you're trying to save money, you need to shop carefully at any of these places. I've determined that they're fine for pens, pencils, paper and file folders (unless Costco carries it, in which case Costco is cheaper) but outrageously high on electronics, toner and software.
NYC used to be the city that never sleeps. It's slowly turning into the city you gotta kick in the nuts to get it moving.
The OfficeCraps in my area has higher prices and is understaffed.
When an Office Depot opened on my side of town I almost hugged the first employee I saw when I entered the store. Every customer that entered the store after me told the Office Depot employees that they were happy the new store had opened and that they lamented OfficeCraps.
I used to work for Office Depot in my early college days. IMHO Great job and great company. Staples isn't too bad either.
All of the retailers cluster. Burger King is usually near McDonalds, Office Max is a block from Office Depot (but Staples is a mile up the road). Frys is a few blocks from CompUSA, and car dealers line up in a row. A good location is a good location.
One of those five was just three blocks from me and I did beaucoup business with them for many years. I liked that all I had to do was look in their catalog at home (before my online days) and know exactly what I needed, then go get it.
The strange thing was that my store almost never had what I wanted to order--they always had to get it from the Richmond Ave store. That was true on probably 2/3rds of the things I needed.
But I was happy with their paper prices and most other things. It was definitely a plus that I didn't have to drive anywhere else to try to price things, so I didn't mind if I had to pay a little more.
The only odd thing was that I had tons of business credit everywhere else, plus lots of $$ in investment accounts at the time, but they wouldn't extend me credit when they opened that store, because I didn't own my house. No other reason was quoted--and they had a very bad attitude with me about it because I fought their decision.
The service was pretty awful by the employees, who had no idea what anything was--but the catalog shopping pretty much overcame that. I was an office supply junkie, anyway, so my requests were often over their heads.
My store opened a printing department and I decided I would try them out because they way underbid Kinko's on some things. Well, ha ha, they never got anything right or on-time, either. Lost $1000s of business from me on that one. And if it hadn't have been for Kinko's also being down the street from me, open 24 hours, I'm not sure what I would have done. Ah, but it was nice to be working then.
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