Office supply chain retailer Office Depot reportedly will close at least 400 of its stores in a merger deal with OfficeMax. Office Depot had over 1,900 stores, but 21% of its stores will consolidate with OfficeMax. The two stores completed their $1.2 billion deal last November.
Office Depot, based in Boca Raton, Florida, has not determined how many jobs will be affected, but plans to place the best employees in new roles at the new combined stores. At least 150 stores will close this year alone.
“The overlapping retail footprint resulting from the merger provides us with a unique opportunity to consolidate and optimize our store portfolio, while maintaining the retail presence necessary to serve our customer,” said chairman and CEO Roland Smith. The merge is projected to save the company $75 million annually.
On Tuesday, Office Depot reported that it lost money in the most recent quarter, despite reports of higher sales and an improved profit forecast due to cost-cutting efforts, including the planned store closures. In the three months ending March 29, Office Depot reported a net loss of $109 million, or 21 cents a share.
The closings are expected to be complete by the end of 2016.
Brick and mortar stores continue to compete with online retailers, a seemingly losing battle. Rival Staples, Inc. said in March it planned to close 225 stores in the US. RadioShack Inc. announced the same month that it will close 1,100 locations.