updated 02:20 pm EST, Wed December 10, 2008
Office Depot Closes Stores
Retailer Office Depot today said it will close 126 of its North American stores in a bid to remain healthy. The company plans to make 112 closures of these within the next three months and the remainder throughout the rest of 2009 as their leases come to a close. New store openings will also be cut in half to 20 next year. The move, which drops about 10.8 percent of the company's total stores, will have a total cost of between $270 million to $300 million for Office Depot but should save about $75 million in day-to-day expenses throughout 2009 while also boosting earnings from $70 million to $90 million.
The company doesn't explain the particular reasons behind the move but says the store cuts are the results of a "strategic review" conducted in late October. These reductions follow a quarter where the company posted a $7 million loss and is facing tough economic conditions where Thanksgiving sales declined for the first time in recent memory.
Office Depot's efforts also follow a significant scaling back by multiple struggling retailers that focus heavily on electronics, including now-bankrupt Circuit City as well as Tweeter.