Office Depot plans to close at least 400 U.S. stores by the end of 2016 as it consolidates locations after its merger with OfficeMax and adjusts to fast-growing online sales.
The office supply retailer had 1,900 stores in the U.S. at the end of the first quarter, so the plans call for closing about 21 percent of them. Office Depot and OfficeMax completed their $1.2 billion deal in November.
Office Depot said that it has not quantified the number of jobs affected but that it will seek new roles for its best talent affected by the closings. It did not disclose locations but said it expects to shut 150 stores this year, mostly in the fourth quarter.
Office Depot operates 16 stores in Tarrant County, and OfficeMax has a store in Arlington, according to the company websites.
The move is part of a push by retailers to reduce their store count in the U.S. as they cope with e-commerce competition and still-shaky consumer confidence. Fort Worth-based RadioShack announced plans in March to close 1,100 stores.
Shares of Office Depot (ticker: ODP) rose 66 cents to $4.83.
Chairman and CEO Roland Smith said in a statement that one of the company’s goals this year is to improve its store footprint in North America to meet customer demand better and ensure that it’s well-positioned in the markets it serves.
“The overlapping retail footprint resulting from the merger provides us with a unique opportunity to consolidate and optimize our store portfolio while maintaining the retail presence necessary to serve our customer,” Smith said.
The closings are expected to result in at least $75 million in annual savings and add to earnings starting next year.
Office Depot, based in Boca Raton, Fla., said it’s still trying to determine expected working capital savings and costs related to the closings.
The company also reported its first-quarter financial results Tuesday, which include results from OfficeMax. The year-ago results do not include OfficeMax.
For the period ending March 29, Office Depot lost $109 million, or 21 cents per share. In the prior-year period, it lost $17 million, or 6 cents per share. Removing merger-related expenses and other items, earnings were 7 cents per share.
Revenue climbed to $4.35 billion from $2.72 billion. Pro forma revenue for the year-ago period was $4.48 billion.