Staples Plans to Close 39 Stores

Office supplies giant Staples (Richmond Hill, Ontario, Canada) is planning to close almost 40 of its 330 stores. The move demonstrates that big retailers are feeling great pressure from e-commerce and discount players.

Industry sources say Staples has circulated a list to landlords and real estate brokers of 39 stores to be downsized. Staples wants to sublet space to other merchants to reduce its costs and improve its bottom line. Staples could close about 12 of the stores without penalties because their leases expire within a year.

Staples’ Q4 sales weakened, with profit sinking by 72% on restructuring charges tied to store closures and downsizings.

Internet selling is beginning to transform bricks-and-mortar retailers, whose products can be sold more easily and cheaper on the web. The shift is forcing businesses to rethink their strategies and offer new, hard-to-find products or services in their stores.

Staples is feeling remarkably more heat south of the U.S. border, where Internet retailing and other competition are more intense. But Staples isn’t standing still. Indeed, it is rapidly developing its own e-commerce offerings. In February, Staples said it was carrying 90% more products on its website.

At the same time, the firm is running an “innovation lab” store in Guelph, Ontario to test new services focused on small-business customers.

The stores to be closed encompass 25,000 square feet but could end up at only 15,000 square feet.