Staples to shutter 225 stores by end of 2015 as sales move online

03/06/2014 10:38 AM

03/06/2014 10:39 AM

First RadioShack, now Staples.

The Massachusetts-based office supply chain became the second major retailer to announce mass store closings this week, underscoring the retail landscape is being remade by shifts in American shopping habits.

Staples said Thursday that nearly half of its sales are now generated online, and it is working aggressively to cut costs and become more efficient. It aims to close more than 10 percent of its North American stores by the end of next year, up to 225 stores, as part of a plan to save about $500 million.

Staples Chairman and CEO Ron Sargent said his company’s stores have fallen short of expectations over the past three years, and the company launched a plan last year to “fundamentally reinvent” Staples.

“This is essential,” he told analysts. “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.”

On Tuesday, Fort Worth-based RadioShack, which is fighting to update its image, announced plans to close up to 1,100 stores, about a fifth of its U.S. locations, after its losses widened during a dismal holiday season.

The recession did heavy damage to chains like Staples, and competition from discount stores also hurts. But online sales are affecting brick-and-mortar stores across the retail sector, no matter if the company is selling clothes, books or electronics.

Shoppers are buying more online, and they’re also window shopping virtually, so they are making fewer store visits, said Bill Martin, co-founder of ShopperTrak, which tracks data at about 40,000 U.S. stores. He said that’s part of the reason the number of stores is contracting even though overall sales are growing, albeit at a slower pace.

“I think it’s pretty clear that the consumer is evolving and might be evolving at a little faster pace than retail,” he said, noting that shoppers can now use smartphones to compare prices during a store visit.

Staples has already shuttered dozens of its North American stores in the past year and said it will close up to 225 by the end of 2015. The company would not elaborate on the number of jobs being cut in the latest round of closings, nor the locations of stores that will close. It has 1,846 stores in North America and Canada, the vast majority in the United States.

In Tarrant County, Staples has locations in Fort Worth, Arlington, Southlake, North Richland Hills, Lake Worth, Watauga, Burleson, Euless and Mansfield.

While it closes stores, Staples is offering more online. It increased the number of products it sells on Staples.com five-fold in the past year, from 100,000 to 500,000. Sargent expects to triple that total to 1.5 million by the end of this year.

Despite the rising popularity of online shopping, Sargent said his company has no plans to give up on physical locations. They believe that customers still want the convenience and service that they can get there.

“That said, stores have to earn the right to stay open,” he said.

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