The decision to close as many as 400 stores including a minimum of 150 after the 2014 back-to-school shopping season is a cost-cutting effort that is tied in to its pre-determined post-merger plans. Office Depot and OfficeMax completed its merger on Nov. 11.
Smith said a staged approach to store closures allows Office Depot to minimize risk and adapt its learnings to future groups of store closings.
We anticipate that by the end of 2016, the optimization of our retail store portfolio will generate additional annual run-rate synergies of at least $75m, in addition to our previously announced $600m of cost synergies, and will be accretive to earnings beginning in 2015, Smith said.
Smith said store-specific decisions are being made through a three-stage holistic market evaluation process, focused on optimizing, productivity and profitability.