Office Depot said Tuesday it plans to close 400 U.S. stores, with 150 stores slated to close in 2014. The company has multiple stores in Hampton Roads.
Boca Raton-based Office Depot completed its $1.2 billion merger with OfficeMax last year. The office-supply store closures relate to overlapping Office Depot and OfficeMax retail stores in some locations.
Office Depot has one store each in Newport News, Hampton, Williamsburg, Norfolk, Chesapeake and Virginia Beach, according to the online store locator. OfficeMax has a store each in Newport News, Hampton, Suffolk and Norfolk and multiple stores in Virginia Beach and Chesapeake.
Chief Executive Roland Smith said the store closures will generate an annual run-rate of at least $75 million in savings by the end of 2016.
"We are delivering merger integration synergies more quickly than anticipated," said Smith in a press release. Smith said he now expects cost-savings synergies from the merger to be more than $675 million, including the store consolidation.
Office Depot also said it lost $109 million, or 21 cents a share, in its first quarter ended March 29 compared with a loss of $17 million or 6 cents a share in the same quarter in 2013. The retailer said its operating loss was $79 million for the January-March quarter.
The first quarter included special charges totaling $151 million from merger-related expenses, IT-related impairment charges, store impairment charges, international restructuring and other operating expenses.
Office Depot reported total sales after the merger of $4.4 billion. The year-ago quarter including only Office Depot was $2.7 billion. When OfficeMax's results are included, the comparative number would be $4.48 billion, the company said.
North American store sales were $1.8 billion compared with $1.1 billion in the first quarter of 2013, including OfficeMax's results. Same-store sales fell by 3 percent.
The retailer ended the quarter with 1,900 retail stores in North America, comprised of 1,082 Office Depot and 818 OfficeMax stores. The company closed nine Office Depot stores and five OfficeMax stores during the quarter. Two new Office Depot stores were opened.
Copyright © 2015, The Baltimore Sun