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Office Depot cutting 112 stores, including Waterloo
By ASHLEY M. HEHER, AP Retail Writer
CHICAGO (AP) — Office Depot Inc. will close about 9 percent of its North American stores and cut 2,200 jobs over the next three months while planning to open fewer locations next year in an effort to cut costs.
Among the stores closing are those in Waterloo and Dubuque.
Shares of the office supply chain rose more than 9 percent Wednesday.
The plan to shutter 112 stores will reduce the chain’s base to 1,163. It plans to close 45 stores in the Central U.S., 40 in the Northeast and Canada, 19 in the West and eight in the South.
Office Depot, which began the year with about 49,000 workers, also will close six of its 33 North American distribution facilities.
Meanwhile, the Delray Beach, Fla.-based company said it plans to shut another 14 stores next year while opening just 20 new sites, half of what it planned.
Analysts said the move was needed and will likely give the company a much-needed short-term financial boost. But they said they doubted the effort would be enough to fix the company’s financial condition.
"It’s not enough to really close the gap and make a meaningful impact compared to Staples and the mass merchant competitors," said Morningstar analyst R.J. Hottovy. "But it’s probably a Band-Aid on a flesh wound."
Goldman Sachs analyst Matthew Fassler said Wednesday’s announcement — while widely anticipated after the company announced it was starting a strategic review in late October — involves more locations that many expected.
"We view this program favorably," he told investors in a research note. "... We expect (Office Depot) shares to benefit from this announcement, though it does not significantly counteract the tough reality of low underlining profitability, and obviously does not remedy cyclical challenges."
Office Depot will take related charges of $270 million to $300 million in 2008 and 2009.
The company plans to work with Gordon Brothers Retail Partners LLC to liquidate the material in the stores, a process it hopes to be completed by late March, according to a regulatory filing.
The struggling retailer reported a third-quarter loss due to slumping sales as consumers and small businesses cut back spending in October.
Office Depot shares, which have tumbled more than 82 percent since the beginning of the year, climbed 22 cents to $2.65 Wednesday.
———
On the Net:
www.officedepot.com
Among the stores closing are those in Waterloo and Dubuque.
Shares of the office supply chain rose more than 9 percent Wednesday.
The plan to shutter 112 stores will reduce the chain’s base to 1,163. It plans to close 45 stores in the Central U.S., 40 in the Northeast and Canada, 19 in the West and eight in the South.
Office Depot, which began the year with about 49,000 workers, also will close six of its 33 North American distribution facilities.
Meanwhile, the Delray Beach, Fla.-based company said it plans to shut another 14 stores next year while opening just 20 new sites, half of what it planned.
Analysts said the move was needed and will likely give the company a much-needed short-term financial boost. But they said they doubted the effort would be enough to fix the company’s financial condition.
"It’s not enough to really close the gap and make a meaningful impact compared to Staples and the mass merchant competitors," said Morningstar analyst R.J. Hottovy. "But it’s probably a Band-Aid on a flesh wound."
Goldman Sachs analyst Matthew Fassler said Wednesday’s announcement — while widely anticipated after the company announced it was starting a strategic review in late October — involves more locations that many expected.
"We view this program favorably," he told investors in a research note. "... We expect (Office Depot) shares to benefit from this announcement, though it does not significantly counteract the tough reality of low underlining profitability, and obviously does not remedy cyclical challenges."
Office Depot will take related charges of $270 million to $300 million in 2008 and 2009.
The company plans to work with Gordon Brothers Retail Partners LLC to liquidate the material in the stores, a process it hopes to be completed by late March, according to a regulatory filing.
The struggling retailer reported a third-quarter loss due to slumping sales as consumers and small businesses cut back spending in October.
Office Depot shares, which have tumbled more than 82 percent since the beginning of the year, climbed 22 cents to $2.65 Wednesday.
———
On the Net:
www.officedepot.com
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chatty1 wrote on Dec 11, 2008 5:01 PM:
" I'm glad you said Office Max....we were thinking today that it was Office Depot that closed and came back at the same location! These stores do sell the same things, and should have known that if it didn't work for Office Max, it wasn't going to work for Office Depot either! Guess we have another long-running going out of business sale to look forward to. "
kraut wrote on Dec 12, 2008 1:28 AM:
" I also can see why they are closing this store the prices are higher than the other stores for the same items. Glad I did not buy my computer there. I have been there several times and never did buy anything from them as I got the same item cheaper from one of the other places. "
Adversary wrote on Dec 12, 2008 1:34 AM:
" Actually, both were here before. Office Max did indeed occupy the same building that Office Depot currently resides in . . . but . . . Office Depot used to have a store in the building that used to be Big Lots & the old Kmart.
The old Office Depot failed . . . Office Max failed. Now Office Depot is failing again.
Crazy, isn't it?
It's sad for the people who are going to lose their jobs in a time where the job market is troubled. But aside from that, I won't miss the store. I used to buy printer ink there until I discovered Cartridge World. After that, there wasn't much reason to go back to Office Depot. "
The old Office Depot failed . . . Office Max failed. Now Office Depot is failing again.
Crazy, isn't it?
It's sad for the people who are going to lose their jobs in a time where the job market is troubled. But aside from that, I won't miss the store. I used to buy printer ink there until I discovered Cartridge World. After that, there wasn't much reason to go back to Office Depot. "
momwhocares wrote on Dec 12, 2008 4:49 AM:
" Actually this saddens me. We have shopped at many stores in the Waterloo/Cedar Falls area, and the truth is I have never received better service and honesty from any of them,except this Waterloo Office Depot. The employees have saved me money and have been very upfront on products. I will miss this store. I also shop Best Buy, and have compared products and prices. And from the words of a Best Buy employee on a comparison I took in...He said, go back to Office Depot and BUY it, we have nothing comparable for that reasonable of a price! I plan to do more shopping there before they close their doors. "
chatty1 wrote on Dec 12, 2008 7:04 AM:
" Thanks Adversary! Now that makes sense. I thought I remembered them being here before. "
Oboy wrote on Dec 12, 2008 7:55 AM:
" Where do you buy your Office Supplies? Salesman call on you? Office Supply Store? On Line and delivered? Walmart? Too many of us choose Walmart for quick and no sale person pushing more product on us. Like the Corner Grocery Store or in our setting W'loo Office Supply is gone. I will miss the Copy Center. "
truthiness wrote on Dec 12, 2008 9:31 AM:
" Maybe if they located an office supply store in Cedar Falls it would succeed. To me, having too many duplicate stores in one concentrated area is not a good thing. I'm surprised that all three home improvement centers are still going. I don't see why an office store and home improvement store can't be located in Cedar Falls. I'm sure there are people from CF that hate navigating the Crossroads traffic just to go to one or two places. "
myvoicematterstome wrote on Dec 12, 2008 10:08 AM:
" I have to say that I'm sorry to see Office Depot go, we just bought a laptop there for our child and I was very, very impressed with the salesperson there. Talk about honesty, you NEVER get that from Best Buy or Staples. This store will be missed. "
momwhocares wrote on Dec 12, 2008 6:14 PM:
" Amen myvoicematters....They had been wonderful to me and my family also "
fmrctzn wrote on Dec 12, 2008 6:37 PM:
" About those three home improvement stores. why don't we conduct our own suvey in this blog.
where do you prefer to shop?
HOME DEPOT
MENARD'S
LOWES'S
It may give us an idea of what the future hold's. "
where do you prefer to shop?
HOME DEPOT
MENARD'S
LOWES'S
It may give us an idea of what the future hold's. "
the_bat wrote on Dec 12, 2008 11:12 PM:
" What? No federal government bailout for Office Depot?
Flippancy aside, I always thought they were a bit better on the customer service end. Frankly, I think their store location was, maybe, part of the problem? That location has just always struck me as, maybe, a bit off. Maybe just a little off the beaten path?
Anyway, with the country in the throes of recession deepening into a depression, largely thanks to the actions of our own government, I'm afraid we're only going to see more and more of this kind of thing.
^o^
—Putting off expansion plans indefinitely. "
Flippancy aside, I always thought they were a bit better on the customer service end. Frankly, I think their store location was, maybe, part of the problem? That location has just always struck me as, maybe, a bit off. Maybe just a little off the beaten path?
Anyway, with the country in the throes of recession deepening into a depression, largely thanks to the actions of our own government, I'm afraid we're only going to see more and more of this kind of thing.
^o^
—Putting off expansion plans indefinitely. "
the_bat wrote on Dec 12, 2008 11:19 PM:
" fmrctzn wrote on DEC 12, 2008 6:37 PM:
" About those three home improvement stores. why don't we conduct our own suvey in this blog.
where do you prefer to shop?
HOME DEPOT
MENARD'S
LOWES'S
It may give us an idea of what the future hold's. "
Lowe's.
But they're also one of my customers.
Which right there, means they're maybe a little smarter than the others?
^o^
—I'm biased. "
" About those three home improvement stores. why don't we conduct our own suvey in this blog.
where do you prefer to shop?
HOME DEPOT
MENARD'S
LOWES'S
It may give us an idea of what the future hold's. "
Lowe's.
But they're also one of my customers.
Which right there, means they're maybe a little smarter than the others?
^o^
—I'm biased. "
momwhocares wrote on Dec 13, 2008 3:14 AM:
" We like Lowe's also, but we are big NASCAR fans and Jimmie Johnson fans. Home Depot is a second choice for us, and Menards has become too much like a department store so we do not shop there. Honestly, a good small hometown lumberyard has better wood and customer service. And of course this is my opinion. "
FAQ wrote on Dec 13, 2008 10:03 AM:
" I also liked Office Depot but it was foolish for them to locate in a failed Office Max store in the same part of the Waterloo-Cedar Falls metro area. It was indeed a nightmare to drive in the crossroads area so many avoided it in the first place. Lots of places in Cedar Falls for a retail computer office supply store to locate and be successful. NIMBY doesn't apply to these types of stores in Cedar Falls. "
Oboy wrote on Dec 13, 2008 11:43 AM:
" FAQ, What about Barnes&Noble or Lowe's, C'Falls had 1st shot at each of these stores? "
capslock wrote on Dec 13, 2008 4:16 PM:
" So, aside from a lousy location with a terrible parking lot (access only through another parking lot with a tiny driveway), does Office Depot have any great clearance deals yet? Or are they shipping the stuff to their other stores? "
FAQ wrote on Dec 13, 2008 6:39 PM:
" Lots of places for them to locate in CF. Lowes wanted to locate in a residential prime area. Lots of places to locate in a commercial zone area in CF. Didn't know that Barnes & Noble first tried to locate in CF and unless they also tried to get into a non-commercial zone, I can't imagine that the city would have tried to stop them. So, where did they try to locate in CF? The land where the new target store is going up would have been an excellent choice for a place like Lowes. Wal Mart got pushed away from the same area that Lowes wanted but ended up a great spot on Viking Road. Lowes could have been in the same area. It makes no sense to put up three office/computer stores within blocks of each other and expect all of them to survive while CF goes without 1 such retail outlet. "
Oboy wrote on Dec 13, 2008 10:24 PM:
" FAQ, sounds like an opportunity for you. You could call your place FAQ's. But remember your biggest competitor will be Wal Mart. "
momwhocares wrote on Dec 14, 2008 7:09 AM:
" I have also wondered why Lowe's built in Waterloo and not Cedar Falls. But College Square mall is slowly losing business also. They have 1 major store and that is Scheels. With Texas Road House and Diamond Dave's out it will keep going down hill. Sad. I shop there occasionally but not much draws me there. Are they still planning on building a Menards on the northeast side of Waterloo on or near Logan Ave? I thought it was a go, but I have heard nothing about it lately. "
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ifmracin wrote on Dec 11, 2008 3:32 PM:
Seriously, who would put an Office Depot in a defunct Office Max location?
There is a reason the other business, who sells the same items, closed! "