More Office Depot Closures Ahead?

Office Depot turned in its second-quarter results yesterday, and they weren’t pretty. Same-store sales fell 18% year over year, and the retailer posted an $82-million loss.

Now the office-supplies chain is coming up against what is promised to be a miserable back-to-school season. Many see this period as heavily promotional with major competition from rivals like Staples and discount chains.

Office Depot has already closed 114 stores in the last year, bringing its total unit count to just over 1,100. Are we likely to see more bad news for retail landlords ahead?

With Circuit City and Linens ‘n Things gone, it seems that were now in an environment where one specialty big-box retailer will rule the landscape in each category. Will Staples have that title before long, or can Office Depot find a way to bounce back?

3 Responses to “More Office Depot Closures Ahead?”

  1. 1 Broker July 29, 2009 at 8:08 am

    When they went to their smaller store design a few years ago they really created a disaster. The revised stores are disorganized, often dirty and hard to shop. Various items are not where you would expect to find them At the end of the day I expect they will merge with Office Max and O-max will run the combined operation.

  2. 2 Carl Cronan July 29, 2009 at 9:13 am

    Even WalMart is jumping in on the back-to-school discount train now, which can’t bode well for ODP. I saw one ODP online ad offering protractors for a nickel. That’s cheaper than they were back in my day!

  3. 3 James August 3, 2009 at 9:10 am

    What were these retailers thinking when they were opening stores across the street from each other? I didn’t get it then, and I don’t get it now, did they really think they were going to out perform their competitor when their stores are almost indistinguishable from each other? They have reduced their business to being commodity suppliers, “depot” is just the right word. It seems the best they can do is split the trade area and divy up the customers 50/50 or in some cases 33/33/33. In this environment its just a matter of time before one or the other fails. Phantom vacancy strikes again. This problem is not going to go away until business activity resumes and these retailers get realistic about the actual capacity of their trade area.

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