The commercial real estate market continues to worsen, exacerbated by a laundry list of store closings.
The latest is sign up is Office Depot.
Here’s the story on the world’s second largest office supplier from Bloomberg.
It is in an article by Heather Burke entitled: Office Depot to Close 112 North American Stores, Cut 2,200 Jobs
“Office Depot Inc. said it will close almost 10 percent of its North American stores and cut 2,200 jobs, or 4.5 percent of its workforce, as the U.S. recession saps demand for business furniture. The shares jumped 11 percent.
The world’s second-largest office-supplies retailer said today in a filing that it will shutter 112 underperforming stores and six distribution centers in the next three months. The closings will reduce Office Depot’s North American stores to 1,163 from 1,275. Fourteen more stores will close next year when their leases expire.
Planned new store openings for next year will be slashed in half to 20, reducing capital spending to less than $200 million in 2009, the company said. In October, Delray Beach, Florida- based Office Depot projected that it would spend $225 million in 2009. The moves will boost cash flow next year by $70 million.
Office Depot has posted losses or profit declines for the past six quarters as businesses stop buying desk chairs and computers. Its sales and profit margins trail larger rival Staples Inc. Some investors have been concerned about the company’s future, said Dan Poole, senior vice president of equity research at National City Bank in Cleveland.
“Today’s announcement boosts cash flow in year one, which improves the company’s prospects for survival,” said Poole. His firm manages $34 billion, including Office Depot shares.”
Ho hum….another day, another new set of store closings.
