Office Depot to Close 112 Stores, Cut 2,200 Jobs (Update3)

[OhioChick]

Source: Bloomberg

Dec. 10 (Bloomberg) -- Office Depot Inc. said it will close almost 10 percent of its North American stores and cut 2,200 jobs as the U.S. recession saps demand for business furniture, sending the shares up 9.1 percent.

The world’s second-largest office-supplies retailer said today in a filing that it will shutter 112 underperforming locations and six distribution centers in the next three months as it eliminates 4.5 percent of its workforce. The closings will reduce Office Depot’s North American sites to 1,163 from 1,275. Fourteen more stores will close in 2009 when their leases expire.

Office Depot posted losses or profit declines for the past six quarters as businesses stopped buying desk chairs and computers. Its sales and profit margins trail larger rival Staples Inc. Some investors have been concerned about the company’s future, said Dan Poole, senior vice president of equity research at National City Bank in Cleveland.

“Today’s announcement boosts cash flow in year one, which improves the company’s prospects for survival,” said Poole. His firm manages $34 billion, including Office Depot shares.

Planned new store openings for next year will be slashed in half to 20, reducing capital spending to less than $200 million in 2009, the company said. In October, Boca Raton, Florida-based Office Depot projected that it would spend $225 million in 2009. The moves will boost cash flow next year by $70 million.



Read more: http://www.bloomberg.com/apps/news?pid=20601103&sid=aEi0d2EC85IM&refer=us

[Jackpine Radical]

1. Our local one is in the process of going out of business.

Their fire sale prices still aren't particularly reasonable.

[musette_sf]

2. not happy to see more closures/job losses

but no surprises here. Office Depot stores are crappy compared to Staples. YMMV, but in my area i will drive miles out of my way to go to Staples instead of Office Depot.

PLUS Office Depot was one of the companies that was involved in compromised credit card data a couple of years ago. many people (me included) had their CCs/debit cards cancelled automatically and new cards had to be reissued. that sucked. my debit card was cancelled before i could receive the letter from my bank explaining why my card was cancelled. i stopped to get gas and groceries on my way home one night, freaked out completely because my debit card would not work in either establishment, and got home to find the bank letter that was delivered that day. so, sad for the employees but no tears for Office Depot.

[Auggie]

6. Huh! I drive miles out of my way to Staples for the same reason.

So that's telling me something... bad store management across the board. Plus, it's harder to find brand name products there anymore. The Office Depot brands pale in quality. And horrible customer service...

Yeah, no tears

[sarcasmo]

3. When do we hit bottom? Every day it's a store closing, Rite Aid is next.

[Occulus]

4. And the shares went UP!

*Where* is the incentive to stem corporate closures and job losses, when shares rise on news like this?

[bulloney]

5. Doncha know? Office Depot's more profitable now because they reduced their costs!

That's another contributing factor to this recession. So many companies have increased their per-share value of their stock by cutting. They're not producing anything. They're not generating real wealth. They're just looking better on paper because they're cutting.

[CatholicEdHead]

7. Shares always rise as "overhead" is reduced through fewer employees

Sad but true. :puke:

[Amerigo Vespucci]

8. I shopped at Office Max today...

...I received a "$10 off on any purchase $10 and over" card in the mail.

I needed some photocopies on the way to the bank. I made the copies, bought some highlighters / gel pens / Post-It flags that I needed, handed them the card, and paid 4 bucks for 14 dollars' worth of stuff. Right now, a "$10 off on a $10 purchase" card will get me in the store. Regular prices will make me wait until I have a critical need, and I will STILL price shop.

Every day, I get "free shipping" and "60 percent off" emails from Omaha Steaks, LL Bean...

In the current economy, merchants have two choices.

They can either be SO SKILLED at marketing that they can keep selling without deep discounts, or they need to pray that what they give away in discounts will be made up in volume.

[llmart]

14. Omaha Steaks.......

not worth the money.

[blue_onyx]

9. I've been expecting this announcement

The Office Depot near me is always empty.

[Azlady]

10. K&R - man oh man, more jobs gone -

[Peace Patriot]

11. When are we going to understand that this is a lie?

“Today’s announcement boosts cash flow in year one, which improves the company’s prospects for survival.” --Dan Poole, senior vice president of equity research at National City Bank in Cleveland.

It never, ever, ever, ever improves a company's prospects for survival, to mistreat its work force. The bad karma always destroys the company in the end, whether direct destruction by looting and profiteering executives and big investors, or by the death of the economy in which the company is doing business. And, in this Bushwhacked economy, it means this: Office Depot will go bankrupt within the year. Firing masses of workers, over-working others, destroying loyalty and productivity, selling products manufactured in foreign lands in the cheapest labor markets, outsourcing customer service (I got bounced once from Argentina, where the guy on the phone said it was raining heavily--that's why we had been cut off--to the Philippines--I asked!--before I could place a very simple Office Depot order, and both call center operators were very difficult to understand), and all the ills of global corporate predation come home to roost. Loot your company in this way--by mistreatment of workers, and support of Bushwhack/fascist policies--and bankruptcy and general economic ruin are inevitable.

This goddamn "neoliberal," "trickle-down" bullshit that Wall Street yammerers like Dan Poole keep spouting is destroying us. It is a lie. You can see the lie in action all over the country. Cutting costs, based on heinous profiteering, leads to ruin.

[Cessna Invesco Palin]

12. But based on your analysis Wal-Mart should be in the shit and they're not.

Furthermore, closing stores does not equate to mistreating workers. I doubt Office Depot will survive, but closing unprofitable shops is at least a step in the right direction.

[sapphire87blu]

13. office depot closing

yeah i am an office depot employee. i am in the frederick
location and my husband is in the hagerstown location. he just
found out two days ago that in a couple weeks to months he
will be out of a job. this was a shock. the stores that are
closing are not because of failed sales. it is because office
depot as a company decided they did not want to renew the
leases. for all you people who have so much bad things to say
about office depot, just take a look at your jobs, and imagine
that the next day, they were gone then imagine losing
everything you have cuz thats whats gonna happen to me and my
hubby. if you have a heart, you should feel really bad. and
for others who say they couldnt get customer service, it is
not the employees faults that our corporate offices refuse to
hire anyone. my store could honestly use about another 3-4
employees just to cover the floor cuz so many people cant wait
for five seconds while we help other people who were in front
of you im pretty sure you know what thats like if youve ever
had to work retail.