7. Office Depot (NASDAQ: ODP)
Office Depot completed a merger with its rival OfficeMax on November 5, 2013. As a result, the new company devised a real estate strategy to close at least 400 locations through 2016. By the end of 2013, Office Depot had closed 168 stores. A merger with Staples, which is currently being negotiated, would likely result in even more store closings. In fiscal 2014, Office Depot had sales of $16.1 billion, up substantially from the previous period. However, the company posted an operating loss of $275 million during its fiscal 2014 year. Like other brick-and-mortar stores, Office Depot has also faced stiff competition from online retailers in recent years, pressuring the company to implement cost-cutting measures.
Nearly 100 years after it opened its first store and began distributing its first catalog, RadioShack in February filed for Chapter 11 bankruptcy protection. While declaring bankruptcy, the company also entered into an agreement to sell 1,500 to 2,400 of its approximately 4,000 company-owned stores to General Wireless Inc. The final number of stores to be sold, RadioShack said in an SEC filing, would be determined by General Wireless. RadioShack said also it would establish co-branded RadioShack-Sprint stores to sell RadioShack retail products, warranties, services and accessories and Sprint-branded mobile devices to operate on the Sprint wireless network. About 950 of the stores will be RadioShack leased stores and roughly 800 will be Sprint leased stores, each selling RadioShack-branded products.
9. Sears Holdings (NASDAQ: SHLD)
When it announced in December a third quarter loss of $548 million, Sears Holdings Corporation also confirmed the previously announced closing of 235 stores, which it described as underperforming. Most of the stores to be closed, Sears said, were KMart stores. The company said it hoped customers would shift to Sears outlets or shop on Sears’ website. After the closings, Sears will still have more than 1,830 outlets. Since the store closings announcement, the price of Sears stock has increased about 13%. The closings came after several steps taken by Sears to consolidate, including its decision one year earlier to spin off its Lands’ End clothing business.
10. Staples (NASDAQ: SPLS)
In March 2014, Staples announced it would close 225 underperforming stores in North America by mid 2015. The cuts were due largely to competition from larger retailers such as Wal-Mart and Amazon.com. The recently proposed merger of Staples and Office Depot would likely result in additional store closings. One retail analyst estimates a merger would result in more than 1,000 store closings, especially since most Office Depot stores are located just down the street from a Staples. Like others, Staples has attempted to develop its online sales, although online sales decreased 5.9% in the company’s fiscal 2014. Overall sales of $22.5 billion were down considerably from years past.