70 Staples locations to close this year
During a recent earnings call, Staples revealed that same store sales in North America were down 7% during the fourth quarter of 2016. The drop in sales, which was blamed on lower foot traffic, led to 48 store closures in 2016. Now another 70 Staples locations will be on the chopping block this year.
‘We have tremendous flexibility to continue right-sizing our retail network without significant cash cost,’ CEO Shira Goodman told analysts on March 9 during the company’s Q4 2016 results earnings conference call.
Unfortunately, this may not be the end of the store closures for the foreseeable future.
Staples has 250 leases coming up for renewal each year over the next three years and each store will be scrutinized for profitability.
‘When the store is approaching lease renewal, we go through a detailed analysis, projecting cash flow, using very conservative assumptions,’ Jeff Hall, Vice Chairman and Chief Administrative Officer, said during the call. ‘When this analysis shows that we’re unlikely to get the return we need, we shut it down.’
For her part, Goodman was noncommittal when asked if any of the four distribution centers that support the company’s 1,255 U.S. stores and 304 Canadian stores would be axed in the near future.
‘I don’t think that’s anything that I feel comfortable sharing at this point,’ she said, ‘but you can rest assured that our supply chain team, while they’re thinking about how do we grow our capacity to support our delivery business are also thinking about how do we reduce our cost structure in sync with our retail business.’
Clark.com has reached out to media relations at Staples for a list of the 70 stores slated for closure in 2017. We’ll update this story when it becomes available.