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DELRAY BEACH, FL-Office Depot continues to step up its store-opening program despite what executives characterize as a “challenging” first quarter sales wise. The retailer has 150 North American stores on tap this year, as well as 200 units in 2008.

Most of the new stores will go into Office Depot’s existing markets, which, acknowledges Chuck Rubin, the company’s president of North American Retail, will impact the performance of stores already there. “The opening of stores as fill-in is likely to negatively impact the sales of existing stores,” he said, during Office Depot’s quarterly conference call. “We feel it is important to strengthen and maintain our position in core markets.”

During the first quarter, which ended March 31, same-store sales at Office Depot’s 1,042 stores in North America fell 3%. Total revenue crept up 3% to $1.8 billion, however, the division’s net income grew to $155 million, up from $135 million during the same year-ago period.

During the quarter, Office Depot opened 16 new stores and remodeled 80 in North America. In it’s entire portfolio, 570 units were recently remodeled, with management saying the rest will be completed in the next few years.

Sales per-sf in stores came in at $265. Management plans $500 million in capital expenditures this year, $100 million less than previously forecast, and $600 million in 2008.

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