Staples to Shut 225 Stores, Seeks $500 Million in Cost Cuts

[Redfairen]

Source: Bloomberg

Staples Inc., the largest office-supplies chain, will close as many as 225 stores in North America and reduce costs by as much as $500 million by the end of 2015, as it forecast sales to drop for a fifth consecutive quarter.

The savings are expected to come from supply chain, retail store closures and measures including “labor optimization, non-product related costs, IT hardware and services, marketing, sales force and customer service,” the Framingham, Massachusetts-based company said in a statement today.

Staples is facing increased competition from online retailers including Amazon.com Inc. Revenue in its fiscal first quarter will fall from a year earlier, excluding any potential impact from its restructuring plan, the retailer said today without providing a projection.

.......

"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,” Chief Executive Officer Ron Sargent said in the statement.



Read more: http://mobile.bloomberg.com/news/2014-03-06/staples-to-shut-as-many-as-225-stores-cut-costs-by-500-million.html

[Demonaut]

1. time to tax Amazon sales...............................

too many people losing jobs because of online retailers

[onehandle]

2. +Infinity. nt

[Blue_Adept]

5. The list grows

We're up to twenty so far;

Arizona
California
Connecticut
Georgia
Indiana
Kansas
Kentucky
Massachusetts
Nevada
New Jersey
New York
North Carolina
North Dakota
Pennsylvania
Tennessee
Texas
Virginia
Washington
West Virginia
Wisconsin

Legislation always lags technology. But it'll catch up. The key is to not isolate Amazon over it because it's more than just them. They're the big, easy target though.

[meow2u3]

9. They DO tax Amazon sales in Pennsyvlania

BTA, Amazon has warehouses in PA.

[Javaman]

24. Same here in Texas. nt

[n2doc]

18. They are taxed

Here in Georgia, at least. Amazon has a huge advantage in being able to provide a wide selection of items, with a built in review system. I go into Staples a couple of times a year to get school supplies, but I really don't need to go there much. Service has sucked there too, they usually only have 1 checkout person, sometimes none and you have to yell for one.

I think we are seeing the effects of the end of UI by the repubs and other austerity measures as well. Retail sales overall have been dropping steadily for the last 2 years.

[hack89]

31. Staples is becoming an online retailer

there are simply things you don't need a brick and mortar store to sell.

I do agree that all online sales should be taxed.

[JaneQPublic]

44. Go to our local Staples & they say "We'll order that for you."

A couple of times I asked the Staples sales staff for a particular item, and they've told me it's not in the store but they can put it on order -- it'll take about a week.

So of course I point out that I have Internet access, too, so I'll just order it myself. That way, it'll come to my house and save myself another trip to their store.

I hate to see people lose their retail jobs, but it's certainly clear why the stores are closing.

[NYtoBush-Drop Dead]

49. maybe they should start with firing the rocket scientist who had them build Staples every 2 blocks i

[olddad56]

50. They already do tax Amazon in Ca.

It isn't making a difference in Staples business. Maybe the problem is more local than that. Too much competition from Office Max and Office Depot and Fryes. You can only slice the pie so thin.

[seveneyes]

51. Sales tax is a regressive tax

And the money you are spending has already been taxed.

[BeyondGeography]

3. I see lots of empty spaces on top of empty spaces

Lots of "reimagining" to come. Actually, there's nothing you can do in many/most cases, other than return the land to nature. There's an old Wal-Mart in Hudson, NY, e.g., that was vacated years ago for a Supercenter down the road. Initially, the county was going to use it for office space, but that fell apart, now it's just a big empty space on the right-hand side of a retail strip with a supermarket as the only viable tenant. Of course, this is happening all over.

All these big box closings in electronics, books, office supplies, etc., these retailers carved out these big new spaces in towns and left big, permanent holes. It's haphazard capitalism.

[RKP5637]

37. We have the same here, a huge Kmart closed, as well as even a very large grocery store. What is

thriving is a large thrift shop that is extremely well run with very fair prices, a couple of small restaurants and a bakery that does well. I'm a nerd forever, and have always done as much as I can online. Amazon is usually my "go to" store as I like the online reviews and talking with other customers about various products. eBay is another.

Going online I know what I'm getting, just going directly to a store one is often looking at boxes trying to figure out what is best and/or a clerk that doesn't know what they're talking about.

[BeyondGeography]

40. The thrift stores are doing well in upstate NY, too

I'm a big yard sale fan; I'll stand around outdoors all day to sell $50 or $60 worth of my excess stuff to someone who wants or needs it. The social aspect (as long as you're being fair, which the vast majority of people are) of it is great, too. People will come out for a bargain, and there's lots of useful stuff just lying around in storage. You could take some of these spaces and make them into Saturday bazaars and they would at least have some life in them and serve a useful purpose. No money in that for the owners though; they're holding out for the next big thing. But e-commerce will continue to destroy the bricks and I don't think it'll ever come.

[gordianot]

4. I never go to Staples another Mitt Romney enterprise.

[LiberalEsto]

28. +100

I started boycotting Staples for that reason

[Samantha]

52. A member of the Board of Bain Capital also serves on the Staples Board

I have no sympathy for Staples since I learned it was performing auxiliary USPO tasks. I know the Republicans want to "dismantle" the USPO (which has one of the largest, if not the largest, unionized work forces in the US), and I support buttressing that entity instead of breaking it up.

Sam

[DonViejo]

6. Wait. Didn't Mittens claim, during the 2012 campaign,

that he "saved Staples"? Nice saving there, Mittless!

[starroute]

7. And Radio Shack is also closing stores

I'm not really looking forward to having to buy my tech stuff at Walmart...

[dembotoz]

8. guess they lost the easy button

[Blue_Adept]

10. This still says most of why these things are happening.

It's not just the shift to people buying online;

[liberal N proud]

11. Until the retailers and oligarchs understand this we will continue to decline

All of America will look like Detroit.

[RKP5637]

41. They don't get it, they just don't F'en get it. TPTB don't get it, they just don't get it. One

of my friends sometimes interacts with individuals in high levels of government, and as he says, they just don't get it. They are set for life, they just have no idea of what most Americans go through just trying to survive. The supply side just doesn't get it, their idea of decreasing profit is to raise prices.

Food prices are outrageous. The prices at the chain grocery stores are outrageous. I was remarking the other day, their goal is to get up to $5 per item or more.

Prices in stores like Home Depot, Lowe's, ACE and the like are outrageous. It's across the board. I spent 20 minutes with my dr. the other day, his bill was $455, fortunately covered by my ins.

This country is sinking, shit jobs will not keep this country afloat into the future. TPTB don't get it. We need new economic models for the 21st century, but politicians won't touch it, they're on the gravy chain of the oligarchy.

Anyone thinking this economic model is going to endure is either quite uneducated, on the take or incredibly naive. And a fair number are just plain stupid and can never be reached.

[fasttense]

15. Amazon is not the problem, The Internet is not taking away sales.

It's the disappeared middle class. If you don't cater to the uber rich, your sales will continue to fall. There just aren't any middle class people with enough money to support these kind of stores anymore.

As a small business person, I would as easily buy from Staples as from Amazon. In fact Staples would be better because I can get it right away and I don't have to pay shipping. What with the new tax on internet sales, it really makes no difference if I buy on-line or from a brick and mortar store. So this BS being passed around that the Internet is taking sales away is a way of hiding the fact that the middle class is in serious trouble in America. An economy can NOT be built on just catering to the uber rich.

I'm sure Mitt didn't help Staples either.

[melm00se]

16. so, from your prespective,

share shift is not an issue?

[fasttense]

21. What do you mean by share shift?

If you mean the number of sales from the store shifting to the internet then I really question the data. Are store sales declining making Internet sales look larger? But since a lot of stores from Radio Shack to JC Pennies, stores catering to the middle class, are suffering, I really don't think the Internet is causing all their problems.

Besides with the new tax on internet sales, on-line shopping doesn't really save you anything. And shipping costs have been seriously high for on-line shopping.

[Blue_Adept]

35. Depends on the product

I do a lot of movie buying and it's pretty much amazon exclusively unless Target or Best Buy have a steelbook exclusive.

A lot of it is just patience though. I wanted to get a particular Batman animated movie. Local stores sell it for $30. Amazon had it for $19 over the holidays and then $25 after that. Then Amazon does a sale, I got it for $13. It's still $30 in all the local stores.

And that works with a lot of products. Big retail stores do not price on the fly. They can't do it.

[fasttense]

36. Interesting, I have not found that to be the case here

Maybe because the cost of living is so low here. If I buy it locally, I normally get a much better price and quality.

Even our local video store out competes Red-box on prices. It was funny to watch Blockbuster trying to compete. They eventually went under while our little local store kept selling more and more.

[melm00se]

55. yes

share shift is when marketshare shifts from one outlet to another.

take amazon for example:

2009 sales were $24.51B
2010 sales were $34.2B
2011 $48B
2012 $61.1B
2013 $74.5B

those are some big numbers and while some of this was due to a growth in population, I would posit that the majority of these sales were shifted away from traditional markets.

yes, Penney's, Sears and Radio Shack are suffering but other companies, like Amazon, are doing quite well in comparison. this is an indication, to me at least, that there is share shift going on. This is being driven by marginally lower costs, simplified shopping, no crowds, no sales clerks and little of no tax costs. These are easy trade offs in exchange for the not having the product right now.

as for shipping: if one is willing to wait, Amazon offers free shipping on orders over a certain amount.

[Adrahil]

20. Well, the internet DOES take sales.

I never buy office supplies in a a brick and mortar store anyway.... less selection, higher prices, and inconvenience. Why WOULDN'T I oder on line?

[fasttense]

25. Because price is the same in the store and on-line.

I've had to add in a 10% tax on all my on-line purchases and shipping costs are outrageous. So on-line really isn't saving me anything. I live in a very rural area which may be why shipping is just so high.

And then the routine office supplies I need are available almost anywhere, so variety is not what I'm looking for.

[Adrahil]

27. I am in Amazon prime.... so no shipping charges....

Well, I DO pay for them, but I order dozens of times a year, so it works out to quite a small amount per order.

Heck, I ordered a SNOW BLOWER online. The non-prime shipping on that item alone was more than my prime membership.

[fasttense]

33. Glad you found a program that works for you.

I was going to buy some large plastic containers from Amazon but the shipping cost was more than the price of the product.

I couldn't believe it. I think the containers were coming from China.

[niyad]

34. "With nearly half of our sales generated online today," clearly, amazon is not the problem.

just looking for a way to make the big guys richer.

[seabeckind]

12. While cost and customers are an easy target

those factors are just symptoms of a much bigger problem.

The last couple times I went into Staples I found one of the 4 things I needed (loosely termed). I had been looking for -- a refill for my Cross pen and that was the only place I found it. The discount stores had nothing.

Staples had one of the other items but it was in quantities of 1000. I've decided I don't "need" that item.

The same thing is true of so many other items I have needed over the last few years. Some are no longer available anywhere, some are just totally unworkable, some are of such poor quality that I'm better off rethinking the situation.

The fact is that we have gotten to the point where profit has won out over everything.

And that most definitely applies to the quality of the people choosing the business model and the retail products.

[Grins]

13. "...and measures including “labor optimization.."

"...and measures including “labor optimization.."

Your Code-Word of the day!!

Someone will have to explain to me how this can happen to a Bain Capital company. Mittens...?

[jsr]

46. Employees will be "optimized" out the door

[Capt. Obvious]

14. Another Bain success story!

[Berlum]

22. "Smirk." - Rmoney (R - Champion of Republicon "Values")

[Orrex]

32. Someone tell laserhaas

That guy is tireless--I wouldn't want to be on his bad side in matters of business or litigation.

[former9thward]

42. Has he ever won anything?

The answer is no. Many lawyers on DU have commented on his "lawsuits" and all agree they are worthless. Oh, I know, the whole judicial system is corrupt and that is the reason he gets nowhere...

[Orrex]

43. For real? Bummer.

I've been watching his etoys pursuit for a while here on DU, but I will readily defer to the expertise of lawyers on the matter.

[Retrograde]

53. Yeah, how's that job creator thingy working out for ya? (n/t)

[Orrex]

17. That was easy.

[Adrahil]

23. Oh SNAP! NT

[allan01]

19. they never , never cut the salaries of the ceos. board of directors . etc

[jsr]

47. They will get bonuses

It's the new corporate tradition.

[Javaman]

26. This sucks.

I use there mech pencils for drawing.

It's a "feel" thing.

I have to now go out and buy up a bunch of them.

[niyad]

29. but we are supposed to worship bain capital, etc., because they are "job creators! the spokespuppet

for staples will not even admit how many jobs will be lost under this "labor optimization" (code words for, we fire as many as we can, and force the rest to do all the work, and probably even cut their pay)

had never liked staples all that much, and, after finding out mittens and bain capital owned it, have not set foot in one, nor will I.

[Garion_55]

30. YAY PRIVATE SECTOR!!

hopefully we can increase the military size and enlist a lot of those people because thats not socialism at all.

[mainer]

38. Noooooooo!

I go to Staples all the time for office supplies. I do NOT want to mail order everything from Amazon.

[hack89]

45. You could mail order from Staples if you don't like Amazon. nt

[heaven05]

39. radio shack, staples, sears.

lots of downsizing from the heyday.

[thesquanderer]

48. To the extent that Amazon is the problem,

Amazon is only doing to Staples what Staples did to the local mom-and-pop stationery stores etc.

[jmowreader]

54. America has an MBA surplus

Your MBA is far more interested in not losing money than they are in making more of it.

War story follows: I used to work at Home Depot and I sold lumber, building materials and millwork. Millwork is a "specialty" department - a lot of what they sell there is custom-ordered product like windows and doors. Each specialty department at Home Depot has one or more "coordinators" - people who deal with vendors and installers. Our millwork coordinator was so slow we were losing customers.

One rainy day I was talking to the store manager about various things and the subject of our millwork coordinator came up. Said I, "you've got to get her some training or get us a new coordinator; it shouldn't take a whole shift to set up three installs when you've got twelve to do." The SM (all Home Depot store managers have MBAs - it's a hiring requirement, which makes sense because each HD store qualifies as a big business on its own merits) explained he liked our coordinator because she didn't make very many mistakes. Then he said something very strange: "which would you rather have, to make money or not lose money?" The dude was shocked as shit when I said "both would be fine. They're not mutually-exclusive constructs."

And this is the thing: today's MBA isn't willing to take risks and "long range planning" is three months. If you have a company that sells canned corn and you want to sell canned beans too, most people would tell you to buy a bean company rather than risking capital by inventing a new brand of beans.

I think this is what's really happening with Staples. COULD they turn the joint around? Absolutely. Start by ending the time honored practice of pretending to pay your staff. Well paid employees give better service. Then use regional preferences to help plan the store. If you sell red, green and white three-ring binders and the store in Pig's Knuckle, Arkansas, hasn't sold a green one since the store opened but the red ones sell faster than you can put them out, box the green ones up, send them to a store where they're popular, and fill the hole with red ones. Find a quality brand of technology product OfficeMax doesn't have and sell the fuck out of it; if you have price matching and the same inventory that means you're not in control of your pricing.

WILL they turn it around? Not highly likely. They will continue to be a clone of OfficeMax and they will wonder what the hell happened when OfficeMax stomps them into the ground.