Staples (SPLS) Announces New Strategic Plan, Including an Acceleration of Store Closings

Staples, Inc. (NASDAQ: SPLS), the world’s largest office products company, has announced what it calls “a strategic plan to better serve the needs of its customers and accelerate growth”. It appears to be a fairly wide-ranging restructuring designed to “integrate its retail and online offering, increase investment in its online businesses, reorganize its operations, implement leadership changes, initiate a multi-year cost savings plan, and restructure its International Operations.”

Staples, along with rivals such as Office Depot, Inc. (NYSE:ODP) and OfficeMax Incorporated (NYSE:OMX), has been hit hard by the weak economy and discounters like Wal-Mart Stores, Inc. (NYSE:WMT) and Amazon.com, Inc. (NASDAQ:AMZN).

One of the more noticeable results will be that Staples plans to reduce its North American retail square footage by some 15 percent by the end of fiscal 2015. This includes some 30 net store closures and 30 store downsizings and relocations in North America during the current fiscal year – an acceleration of previously announced plans. It will also close some 45 stores in Europe this fiscal year.

Staples will also combine its U.S. Retail and Staples.com business, invest in online and mobile capabilities, and broaden its product line beyond office supplies.

Internationally, in addition to the European store closings noted above, the company announced a leadership change in Europe, said it will pursue the sale of its European Printing Systems business and rebrand its Australian operations.

For shareholders, this new strategic plan will continue the company’s stock repurchase program. This is expected to return $450 million to shareholders this fiscal year.

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