Office supplies retailer Staples is planning to close more North American stores in 2016, adding to the hundreds of locations it has shuttered in recent years.
The retailer joins other stumbling retail giants in the last few weeks that are closing stores, including Sports Authority, Kohl’s and Sears.
Staples, which is in the midst of a battle to win government approval to buy rival Office Depot, said it would close 50 of its 1,607 North American stores this year as it seeks to slow declining sales. In the last two fiscal years, Staples closed 242 locations in the U.S. and Canada.
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The retailer also reported another disappointing quarter: Same-store sales fell 5% in Q4, while Staples’massive online business provided little relief, rising only 1%. Its services to business segment fell 1.4%. Staples forecast overall sales would drop again in Q1, getting the year off to a weak start.
Staples continues to struggle and it seems unlikely to be helped by any acquisition of rival Office Depot, which U.S. regulators have moved to block.
The Federal Trade Commission argues that a merger of the two companies would stifle competition and that businesses would be forced to pay more for paper clips, note pads and other office supplies. European regulators have approved the deal, as long as the company sells some its operations.
In an effort to save the merger deal, Staples has offered to bring some $600 million in contracts to office supply wholesaler Essendant, formerly United Stationers, which could presumably boost the business of much smaller company supplies retailers like ULINE and W.B. Mason.
But regulators don’t appear to believe that even this action would have enough of a mitigating effect on the loss of competition in this space. To give a sense of the size of Staples’sales through business contracts, these will likely garner some $8.4 billion this year for the retailer, while its 1,200 stores generate some $9.6 billion.
