FRAMINGHAM, MA—With its sales moving increasingly to online channels, office-supply retailer Staples Inc. said Thursday it plans to close 225 North American stores by the end of next year. The closures are part of a multi-year cost savings plan that is expected to generate annualized pre-tax cost savings of approximately $500 million by the end of 2015.
Staples’ plan to shutter more than 10% of its 1,846 stores in the US and Canada is a smaller chunk of its total than the 20% of Radio Shack locations that will go dark, as announced earlier this week. Further, the company’s string of poor quarterly results is shorter than Radio Shack’s.
However, Staples said Thursday it reduced its footprint last year by one million square feet through closing 40 stores, and it’s safe to say that shutting another 225 will add more than five million square feet of vacant space to the tally for retail landlords across North America. The average Staples runs between 18,000 and 24,000 square feet, although the company has tested out smaller prototype locations.
In contrast to the company’s fourth-quarter performance as a whole, which saw a 10.6% year-over-year decline in sales, Q4 business at Staples.com was up 10% Y-O-Y. The company ended 2013 with 500,000 products available through online channels, a fivefold increase from the beginning of the year.
“A year ago, we announced a plan to fundamentally reinvent our company,” says Staples’ chairman and CEO, Ron Sargent. “With nearly half of our sales generated online today, we’re meeting the changing needs of business customers and taking aggressive action to reduce costs and improve efficiency.”