Staples on Thursday joined the list of retailers shrinking their physical footprint to focus on online sales.
The office supplies store plans to close 225 stores in the United States and Canada — 12 percent of its North American shops — by 2015 as part of a $500 million cost-cutting program. Staples reported a heavy fourth-quarter sales loss, and it forecast weaker sales for the current quarter.
The Massachusetts company is facing the same issues affecting most retailers, such as competition from behemoths Wal-Mart and Amazon. Staples closed 109 stores in North America and Europe in 2013, the company said. It currently operates more than 2,200 stores worldwide, including 1,515 stores in the United States and 331 in Canada. (Amazon chief executive Jeff Bezos owns The Washington Post.)
“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, 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 15 percent Thursday to close at $11.35.
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 bottom lines. This year has seen much of the same so far. On Thursday, Costco, Walgreen, RiteAid and other chain stores reported slight increases in same-store sales but noted that customer traffic remained low.