Is it only online sales? Dwindling incidence of printing from the computer? Or are the winter weather, slow-growth economy, and dollar stores also to blame for the fact that Staples has become the second major chain this week to announce a mass closing of stores.
The nation's largest office-supply company, one that helped remake the face of American retailing a generation ago into a collection of "big boxes," said it's going to close more than 10 percent of its North American stores by the end of next year, up to 225 of them, as part of a plan to save about $500 million a year.
The reason cited is that nearly half of Staples' sales now are online, both to businesses and consumers, and it must adjust. "This is essential," Staples CEO Ron Sargent told analysts, according to the Associated Press in describing his plan to "fundamentally reinvent" Staples.
"Our customers are using less office supplies, shopping less often in our stores and more online, and the focus on value has made the marketplace even more competitive," he said.
Staples' announcement was in part an echo of the admission made by RadioShack earlier this week that its continued attempts to redefine its business model are failing and that it plans to close up to about one-fifth of its US locations. Some analysts also blamed the recession and sluggish US economy for the woes of both companies.
Staples had long been a success in an industry that in the late Nineties was so robust that the US government forbid a merger of rivals Staples and Office Depot. Office Depot and Office Max completed a $1.2 billion merger last fall.
Though Sargent insisted that Staples would still actually maintain physical locations that meet the numbers, Staples has increased the number of products it sells online five-fold in the past year, to a half-million items, and expects to triple that total to 1.5 million by the end of this year. The business has been commoditized and online ordering, usually with free delivery, is easy.
"I think it's pretty clear that the consumer is evolving," Sargent said, "and might be evolving at a little faster pace than retail" is.
The nation's largest office-supply company, one that helped remake the face of American retailing a generation ago into a collection of "big boxes," said it's going to close more than 10 percent of its North American stores by the end of next year, up to 225 of them, as part of a plan to save about $500 million a year.
The reason cited is that nearly half of Staples' sales now are online, both to businesses and consumers, and it must adjust. "This is essential," Staples CEO Ron Sargent told analysts, according to the Associated Press in describing his plan to "fundamentally reinvent" Staples.
"Our customers are using less office supplies, shopping less often in our stores and more online, and the focus on value has made the marketplace even more competitive," he said.
Staples' announcement was in part an echo of the admission made by RadioShack earlier this week that its continued attempts to redefine its business model are failing and that it plans to close up to about one-fifth of its US locations. Some analysts also blamed the recession and sluggish US economy for the woes of both companies.
Staples had long been a success in an industry that in the late Nineties was so robust that the US government forbid a merger of rivals Staples and Office Depot. Office Depot and Office Max completed a $1.2 billion merger last fall.
Though Sargent insisted that Staples would still actually maintain physical locations that meet the numbers, Staples has increased the number of products it sells online five-fold in the past year, to a half-million items, and expects to triple that total to 1.5 million by the end of this year. The business has been commoditized and online ordering, usually with free delivery, is easy.
"I think it's pretty clear that the consumer is evolving," Sargent said, "and might be evolving at a little faster pace than retail" is.
Source: brandchannel.com
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