Office Depot To Spend $300M Shrinking Store Size
BOCA RATON (CBSMiami) – Office Depot knows it has to combat the high costs associated with its supersize brick-and-mortar stores.
Toward that goal, the South Florida Business Journal reports Office Depot told analysts during a conference call Tuesday it will downsize or relocate about 100 stores in 2013, saving as much as $20 million a year.
Beyond 2013, the Boca Raton-based retailer said it plans to spend $60 million a year over the next five to downsize or relocate about 500 stores into small or mid-sized stores.
For Office Depot, small-sized means 5,000 to 7,000 square feet, while mid-sized stores will be 15,000 to 17,000 square feet, Kevin Peters, president of North American operations at Office Depot, told those on the conference call.
In another cost-cutting measure, Office Depot also said it would close between 10 to 20 stores per year as leases expire.
At the end of the third quarter, Office Depot (NYSE: ODP) operated 1,114 stores in the U.S. and Puerto Rico. The company’s North American retail division opened one new store and closed four during the quarter.
Office Depot reported third-quarter earnings Tuesday citing a 5-percent drop in quarterly sales to $2.7 billion and a net loss of $70 million.
Shares of Office Depot reached its 52-week high of $3.81 on March 27 and its 52-week low of $1.51 on Sept. 4.
The South Florida Business Journal contributed material for this report.