(Crystal Proenza is associate editor of Real EstateFlorida.)

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DELRAY BEACH, FL-Locally based Office Depot Inc. has announcedthat it will close 112 underperforming retail stores and sixdistribution facilities throughout North America over the nextthree months. The closings account for approximately 9% of itsretail locations, with an additional 14 stores to close in 2009 asleases expire. The office furniture company will be left with 1,163stores and 27 distribution facilities in North America.Approximately 2,200 jobs, or 4.5% of its workforce will be cut,according to Bloomberg News. The closings are expected toadd $90 million to pre-tax earnings in 2009.

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"Just like many companies, Office Depot is faced with conductingbusiness in an extremely challenging economic environment so weneed to be constantly reviewing our assets and store base," MelissaPerlman, a spokesperson for Office Depot, tells GlobeSt.com. "Thedecision for the closings was part of a strategic review ofunderperforming stores or stores in locations that are no longer astrategic fit for the company."

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The closings will be located throughout North America with 45 inthe Central US regions, 40 in the Northeast and Canada, 19 in theWest and eight in the South. Each of the stores are approximately20,000 square feet, according to Perlman.

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New store openings for next year have also been cut in half to20, which will facilitate a reduction in total company capitalspending in 2009 to less than $200 million, according to OfficeDepot. The company has annual sales of nearly $15 billion in 42countries, and employs approximately 50,000 associates, accordingto its website. Office Depot is also one of the world's largeste-commerce retailers with an annual revenue of $4.9 billion inonline sales.

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"The announcement is not a surprise because consumers arefrozen--they're not spending," says Stephen Nostrand, executivevice president with Collier Abood Wood-Fay in Miami. "We're in ashrinking economy and it's an extraordinarily difficult time.Companies are squeezing everything they can out of the orange anddoing those things that prudent management would do to showshareholders they're making adjustments based on economicconditions today."

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Nostrand says the list of national chains and brand names thatare closing stores and distribution centers is, though staggering,a direct reflection of what's going on with the economy. "Evenhigh-net-worth individuals with huge amounts of discretionaryincome are frightened and are not buying or fixing up assets," hesays.

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"Unfortunately, this type of announcement from a retailer willcontinue to show up in the near future," says Greg Masin, retailbroker with Cushman & Wakefield of Florida. "Retailers areunder tremendous pressure, not just in their top line sales, butfrom Wall Street and the credit markets as well. Boards ofdirectors need to take some action to offset declining same-storesales and cash positions. Store closings are one way to displaythat type of action."

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Even retailers that are perceived as relatively healthy willlook to close stores, warns Masin. "They will take the opportunityto trim below average producers from their portfolio. More vacantstorefronts are in store.

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