Office Depot's store closings announcement Tuesday will affect about 400 locations
over the next two years as the office supplies giant looks to reduce its footprint following the acquisition of OfficeMax last year
The company estimates the store closings will save $150 million by 2016, with 150 locations shutting its doors in 2015, while the remainder will be closed by the end of 2016, The Los Angeles Times reported
"One of our 2014 critical priorities is to improve our store footprint in North America," Chief Executive Officer Roland Smith said in the statement. "The overlapping retail footprint resulting from the merger provides us with a unique opportunity to consolidate."
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The 2013 OfficeMax merger with Office Depot added some 823 stores to its lineup, CNN Money noted
Shares of Office Depot, which also reported better-than-expected quarterly results, rose as much as 20 percent in early trading, with the stock being among the highest percentage gainers on the New York Stock Exchange on Tuesday, Reuters reported
The Boca Raton, Florida-based company, which as more than 2,000 stores in total, expects to spend $400 million in cash on the merger integration from 2014 through 2016, with $300 million coming this year, Bloomberg News reported
. Office Depot raised its full-year adjusted operating income forecast to at least $160 million from $140 million.
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The company posted a first-quarter net loss of $109 million, or 21 cents per share, attributable to common stockholders, Reuters noted. A year earlier, Office Depot had a net loss of $17 million, or 6 cents per share.
In March, the nation's largest office-supply retailer, Staples, announced it would be closing 225 stores in North America
to trim expenses due to weaker than expected sales. The company has 2,200 stores worldwide, 1,500 of them in the United States.
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