Mar 11, 2017 09:13 AM EST
The retailer Staples announces plans to close stores on Thursday as it suffered a decline in stocks and sales. Staples reported a $548 million loss and a three percent drop in sales during the fourth quarter, which ended in January.
The disappointing results have led Staples to shutter 70 stores in North America or 4.5 percent of its 1,600 locations during the current year. Earnings came in at 25 cents per share in the fourth quarter that was a penny less than what some analysts have estimated. Last year, Staples closed 48 stores and has eliminated 350 stores over the last five years.
Staples also tried to acquire Office Depot Inc. but the merger was blocked by Federal Regulators due to antitrust grounds arguing that doing so will affect business customers. The fallout deal was followed by CEO Ron Sargent's resignation, which came as a shock to many Staples employees and the people, in general. Shira Goodman then served as interim Staples CEO.
The series of events prompted the office supply store to search for a new growth plan. In October, Staples went on with a new strategy to license its name and get more revenue from business services. The company also offloaded its retail business in the UK last quarter. But amidst the business reconstruction efforts, latest results sent Staples down as much as 6.8 percent to $8.35 in New York. Before Thursday, the stock had been down less than one percent in 2017.
Traditional brick-and-mortar stores have been under pressure for some time due to greater online competition such as Amazon. Aside from Staples, many announced plans to close its stores this year including RadioShack, Sears Holdings, JCPenney, The Limited and Macy's. In addition, RadioShack has filed for bankruptcy for the second time in two years aside from plans to close 200 of its 1,500 stores. Sears also plans to shut down 150 Sears and Kmart stores, altogether, JCPenney sets on 140 stores and Macy's with 68 stores as well as
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