5. Office Depot
> Forecast store closings: 125 to 150
> Number of U.S. stores: 1,114
> One-year stock performance: 50.7%
Office Depot Inc.’s (NYSE: ODP) troubles date back to years of competition against OfficeMax Inc. (NYSE: OMX) and Staples Inc. (NASDAQ: SPLS), as well as big-box retailers like Walmart. All three stores were dealt a blow from reduced business activity during the recession, as well as increased popularity of online retailers such as Amazon. The company’s North American division reported an operating loss of $21 million in the third quarter of 2012. Office Depot plans to relocate or downsize as many as 500 locations and close at least 20 stores. In the third quarter of 2012, the company closed four stores in the United States, and same-store sales were down by 4% year-over-year.
> Forecast store closings: 500 to 600
> Number of U.S. stores: 4,471
> One-year stock performance: -2.2%
In November, just as the holiday season was in full swing, GameStop Corp. (NYSE: GME) announced it would close 200 stores in 2013. The video game retailer, hurt by growth in mobile gaming at the expense of console gaming platforms, had a 4.6% year-over-year decrease in revenue, as well as a 4.4% decline in comparable-store sales over the nine-week holiday period. For the third quarter of 2012, the most recent quarterly release, gross profits fell at GameStop’s three core product segments: new hardware, new software and used products.
Editor’s Note: In November, Gamestop repeated its plan to close 200 stores in 2012, and not 2013.
> Forecast store closings: 150 to 175
> Number of U.S. stores: 872
> One-year stock performance: 80.8%
OfficeMax, like rival office-supply stores such as Staples and Office Depot, has been hit hard by both online competition and lower sales for technology products such as personal computers. In the third quarter of 2012, OfficeMax reported that same-store sales in the U.S. fell by 2.6%. Midway through the fourth-quarter of 2011, the company announced that it would seek to close 15 to 20 stores every year for the next five years. In addition, the company has been in the process of downsizing its square-footage presence by moving into smaller locations.
> Forecast store closings: 450 to 550
> Number of U.S. stores: 4,412
> One-year stock performance: -68.1%
Earlier this month, RadioShack’s long-term prospects as a viable company took another hit when its partnership with Target ended after neither side could come up with a mutually beneficial deal. The company had operated mobile kiosks at 1,500 Target locations across the country. Shares of the consumer electronics company are down by roughly 68% over the past year. The company recorded an operating loss of nearly $60 million in the third quarter of 2012. Same-store sales in the quarter dropped by 1.6% year-over-year. Revenue in the quarter fell by 3.8% year-over-year. Between 2010 and 2011, the company closed 2.2% of its existing locations — more than 120 locations in all.
Douglas A. McIntyre, Samuel Weigley, Alexander E.M. Hess, Michael B. Sauter