Staples to Shut as Many as 225 Stores, Cut Costs by $500 Million by Bloomberg Mar 6th 2014 7:13AM Updated Mar 6th 2014 2:37PM Staples Plunges Most in a Year After Cutting Profit Forecast Patrick T. Fallon/Bloomberg via Getty Images By Ben Livesey Staples (SPLS), the largest office-supplies chain, will close as many as 225 stores in North America and reduce costs by as much as $500 million by the end of 2015, as it forecast sales to drop for a fifth consecutive quarter. The savings are expected to come from supply chain, retail store closures and measures including labor optimization, non-product related costs, IT hardware and services, marketing, sales force and customer service, the Framingham, Mass.-based company said in a statement Thursday. Staples is facing increased competition from online retailers including Amazon (AMZN). Revenue in its fiscal first quarter will fall from a year earlier, excluding any potential impact from its restructuring plan, the retailer said Thursday without providing a projection. Shares fell 15 percent to $11.35 at 11:08 a.m. in New York and earlier dropped as much as 17 percent for the biggest intraday decline since Aug. 15, 2012. The stock slid 16 percent this year through yesterday, compared with a 1.4 percent gain for the Standard & Poors 500 index (^GPSC) . With nearly half of our sales generated online Thursday, were meeting the changing needs of business customers and taking aggressive action to reduce costs and improve efficiency, Chief Executive Officer Ron Sargent said in the statement. The company expects earnings of 17 cents to 22 cents a share for the first quarter. That compares with the average analyst estimate of 27 cents on an adjusted basis, according to data compiled by Bloomberg. Analysts on average estimate the retailer to post revenue of $5.74 billion in the quarter, compared with $5.81 billion a year earlier. Kirk Saville, a spokesman for Staples, didnt immediately respond to voicemails and an e-mail seeking comment on how many jobs will be eliminated by the cost-cutting plan Staples joins RadioShack (RSH), the electronics retailer, in trying to overhaul its business by closing stores in the face of increasing competition from e-commerce rivals. The company announced plans March 4 to close about a fifth of its stores after fourth-quarter sales missed estimates. Staples shuttered 42 stores in North America last year, ending 2013 with 1,846 in the region. The company reported fourth quarter income from continuing operations of $212 million, or 33 cents a share, compared to $90 million, or 14 cents a share, a year earlier. the worlds largest office-supplies chain, plans to shutter as many as 225 stores in North America and cut costs by as much $500 million by the end of 2015, as it forecast a first-quarter sales decline. The savings are expected to come from supply chain, retail store closures and measures including labor optimization, non-product related costs, IT hardware and services, marketing, sales force and customer service, the Framingham, Mass.-based company said in a statement Thursday. To contact the reporter on this story: Ben Livesey in San Francisco at [email protected] To contact the editor responsible for this story: Cecile Daurat at [email protected] Gallery: 17 Tricks Stores Use to Make You Spend More Money 2 1 1 0 105 8 7 0 More From Bloomberg: Putin Says No Immediate Need to Invade Eastern Ukraine, Leaves Threat Dangling College Grads Taking Low-Wage Jobs Displace Less Educated Staples to Shut 225 Stores to Trim $500 Million in Costs Highest Minimum-Wage State Washington Beats U.S. Job Growth Putin’s Ukraine Gambit Hurts Economy as Allies Lose Billions You Will Turn Off Your TV Television is on its way out. And you’re going to be thrilled. Because that means... as soon as 2014, you could ditch your cable company... along with all the headaches. But that also means the $2.2 trillion entertainment industry is up for grabs. And The Motley Fool knows exactly which three companies are poised to hijack your cable provider’s profits. Our newest FREE report details everything you need to know to line your pockets as cable crumbles. Privacy/Legal Information Learn about investing from the comfort of your own home. Portfolio Basics Take the first steps to building your portfolio. View Course » Investment Strategies Learn the strategies you need to build a winning portfolio View Course » View All Courses Add a Comment Sign in » Add a Comment *0 / 3000 Character MaximumSubmit 105 Comments Filter by: Mike Thats a shame...lots of people losing their jobs but that store is high priced. 14 minutes ago Ron 5 years and Barry has made thing worse! He will pass Carter as the worst President EVER! Take gas alone. The Dems rightfully ragged on Bush daily for double priced gas. So, where are they now that gas is DOUBLE AGAIN under Obama? Want some PROOF? Google: Gas Price, Dec 2008, CNN to see that gas WAS $1.65!!!! 16 minutes ago +1 millsrb3 I dont care if they shut all the Staples stores. Will not shop there again. 17 minutes ago rjggoldstandard Unemployment going down but every week stories about stores closing hundreds of locations? 19 minutes ago +1 Eduardo Pena Soon on-line shopping will be the norm. I love Amazon. You cant beat it. 21 minutes ago +1 letitbe15212 This doesnt surprise me. I needed a box a few weeks back to mail some DVDs and I stopped at Staples. The thing was $4.99 plus tax. When the guy told me my total I just looked at him and walked away - didnt say a word. Got my box over at the Dollar Tree for a buck. The world is unreal sometimes...unreal I tell ya. 21 minutes ago rmorrell200 As the economy dwindles,,, we make less money. As we make less money, we become more frugal with our money,,, maybe even cheap. As we do that,,,we tend to buy imports. As we do that , we do not support made in USA. As we do that, more jobs are lost,,, As we do that. we are hungry and have to eat our imports. 27 minutes ago +2 rmorrell200 These stores were not making money for some time. They were built within an area that at that time had an economy to sustain them. Things got worse and hasnt gotten any better so now, you have stores closing. Ive seen it before and its most likely going to continue. Stores used to tie service to a product,,, not today, its all about low price and no service. Look at Sears. 31 minutes ago +2 ltg1201 Mitt Romney really helped Staples! 32 minutes ago 1 reply to ltg1201s comment Mike Long time ago... 14 minutes ago rssmray Manufacturers are squeezing out the middle man. you can buy all this stuff on line. why have stores and employees if you sell direct. Sometimes free shipping and no taxes. I think we are in the middle of a big change coming stores vs. on line. Corporations have big time money. Due to this high stock market. The Greed is getting worse. 1 hour ago +2 Load more comments My DailyFinance Register today to manage your own Portfolios and Savings Challenge. My Portfolios SavingsChallenge Recommended Articles The State With the Highest Minimum Wage Beats the Nation on Job Creation Southern Dining at Bob Evans, Cracker Barrel Goes South Another Day, Another Retailer in a Massive Credit Card Breach College Grads Taking Low-Pay Jobs Once Left to Less Educated Money Minute: Walmart Stokes Smartphone Wars; Coal Firm Faces Big Fine Sign in / Register Categories Company News|Earnings|Retail|Consumer Goods Featured Stocks SPLS -2.06 11.34 COST -2.97 113.50 AMZN -0.21 372.16 RSH -0.095 2.065 Related Tweets TVMCCA RT @spfeifer22: #Lakers arent only thing losing at Staples Center: With sales plummeting, Staples to close 225 stores t.co/9Te4ee15… Retweet angelo_chirillo $SPLS Staples to close 225 stores as sales move online t.co/dtok5za640 Retweet More Tweets Related Articles Disney Laying Off 700 Workers from Interactive Unit 2 More Grocers Nix Biotech Salmon; Walmart Remains Mum Factory Orders, Shipments Slip in January Girl Scouts Asked to End Partnership with Barbie Southern Dining at Bob Evans, Cracker Barrel Goes South Money Minute: Walmart Stokes Smartphone Wars; Coal Firm Faces Big Fine Related Topics consumer goods, earnings, Investing, office supplies, retail, staples, Staples earnings, stocks, wall street Investing Calculators Set investment goals Spotlight Money Minute: Walmart Stokes Smartphone Wars; Coal Firm Faces Big Fine Stocks Walmart Stokes Smartphone Wars Read Story » Free Investing Courses Free Investing Courses How to Manage Your Portfolio Learn in 10 Mins »
Posted on: Thu, 06 Mar 2014 20:23:47 +0000
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