Staples To Close Stores, Invest More Online

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By Rick Saia

Framingham-based office supply retailer Staples Inc. will invest more in its online businesses and restructure operations around the world, as it looks to cut costs and close or consolidate about 60 retail stores, the company announced.

Staples said that as part of a strategy to accelerate growth, it's looking to shave $250 million a year in costs by the end of its 2015 fiscal year, while also aiming to reduce its retail square footage in its North American stores by about 15 percent. Also, the company said it will accelerate the closing of about 15 U.S. stores later this year to save about $35 million. In addition, Staples said it expects to reduce its store count by 30 and downsize 30 more during its current fiscal year.

The company said it's combining its U.S. retail and Staples.com business units under the leadership of Demos Parneros, who has been head of the company's U.S. stores since 2002. Meanwhile, Joe Doody will continue to lead North American contract and Quill.com operations.

In its statement, Staples said it's "significantly expanding" its offerings beyond office supplies to better serve business customers. There were no further details about those offerings. Staples' North American stores saw a 2-percent drop in comparable store sales in its second quarter, reflecting a decrease in customer traffic and declines in sales of computers, software and accessories, it reported.

"Our vision is to establish Staples as the single-source product authority for millions of businesses," said Ron Sargent, Staples' chairman and CEO. "We are building on the strengths that are the foundation of our success by focusing on five key priorities: accelerate growth in our online businesses; fully integrate retail and online; improve retail store productivity; restructure our international operations; and return cash to stakeholders."

The company also announced it would restructure international operations, especially in Europe, where it's looking to sell its European Printing Systems business. It also appointed a new president for its European division, John Wilson.

With the moves announced today, Staples expects to record pre-tax charges of nearly $1 billion.