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Staples to close 50 stores in 2016

Staples to close 50 stores in 2016

March 7, 2016

Ron Sargent, CEO of Staples

Ron Sargent, CEO of Staples

The retailer also confirmed that it laid off over 1,000 staff between last November and January this year.

WSPA and Boston Globe reported on the retailer’s conference call with analysts last week, in which CEO Ron Sargent confirmed that the company “plans to close 50 stores after sales declines”, which would bring the number of closed stores to 300 since the start of 2014. Additionally, Sargent confirmed that executives “laid off more than 1,000 employees between November and January”, with the company “acknowledging the job losses for the first time”.

Staples also reported its “fifth consecutive year of declining revenue”, and the company’s spokesman said that it did “not track where the layoffs occurred, but current and former employees said in January that hundreds lost jobs at the Framingham headquarters”. Sargent also discussed the latest on the Office Depot merger, with a “plan B” being worked on “in case the deal doesn’t happen”, and this would include “boosting sales of other products besides office supplies and closing more stores”.

Sargent noted that “our top priority is to get the deal done”, and he highlighted his belief that the opposition to the merger showed a “deep misunderstanding” of office supplies, adding that “competition has materially intensified, not lessened. This has been a long and surprisingly frustrating road”.

The Federal Trade Commission (FTC) filed a lawsuit last year to block Staples and Office Depot’s $6.3 billion (€5.8 billion) merger, with the suit seeing the companies offer to divest $1.25 billion (€1.14 billion) of commercial contracts in exchange for approval. This was rejected by the FTC, leaving Staples to call it “misguided”, and was an upgrade from a previous offer of $600 million (€558 million).

Both companies extended their merger agreement to May in January in light of the court case, after new developments earlier this year suggested “renewed optimism” in the merger being granted, but sources stated “the odds of a settlement are near zero”. Staples is also reportedly facing the threat of loans being withdrawn, and made a series of staff cuts. The two companies previously called the decision to block their merger “flawed”, with a court case likely in March.

However, the European Union recently approved the merger after Staples and Office Depot made concessions, while both companies also sold their corporate contract business to Essendant, but the FTC was said to have been “unimpressed” by the concession.

Categories : City News

Tags : Business Office Depot Staples

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