Staples to close 225 stores by 2015

Mike Blake/Reuters - Staples, the largest U.S. office supplies retailer, forecast a fall in current-quarter sales as it loses customers to mass market chains and e-retailers, and the company said it would close up to 225 stores in North America by 2015.

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Amrita Jayakumar, Thursday, March 6, 10:12 AM E-mail the writer

Staples joins the list of retailers that are shrinking their physical footprint to focus on online sales.

The office supplies giant said Thursday that it plans to close 225 stores in the United States and Canada by 2015 as part of a $500 million cost-cutting program. Staples reported a heavy fourth-quarter sales loss and forecast weaker sales in the current quarter.

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The Massachusetts-based company has faced the same issues affecting most retailers, such as competition from behemoths like Walmart and Amazon. Staples closed 109 stores in North America and Europe in 2013, the company said. It operates 1,515 stores in the United States, 331 in Canada and more than 2,200 worldwide.

“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,” Ron Sargent, Staples’ chairman and chief executive officer, said in a statement.

The retailer’s fourth-quarter sales fell 4 percent to $5.9 billion, compared with a year ago. Same-store sales were down 7 percent in the fourth quarter, Staples said, but online sales increased by 10 percent in the same period. Staples’ share price fell about 12 percent to $11.76 in early morning trading.

Earlier this week, RadioShack said it was closing 1,100 stores as it tries to cut costs and modernize its brand. Macy’s, J.C. Penney and other retailers have also announced plans to close stores.

The holiday season was tough for retailers as Americans stayed away from stores, the weather worsened and retailers over-discounted, hurting their own bottom lines. This year has not been very different so far.