A New Perspective on B&N: Staples to Close 12% of their Stores by 2014
The office supply company released their quarterly and annual earnings report this morning and the picture isn’t terribly rosy for Staples stockholders or its employees.
Staples’s retail and online sales totaled $23.1 billion in 2013, down more than $1.2 billion from 2012. Even when you factor out the extra week in fiscal year 2012 in that the 2013, Staples’s revenue for 2013 was still down 3.4% ($800 million).
Part of that decrease can be blamed on the Staples stores that were shut down during 2013, but even then sales were down 2% in 2013 when compared to 2012. As a result of the decreasing sales, Staples has announced plans to cut cost by closing under-performing stores.
And since most of the drop in revenue can be attributed to Staples’s NA stores ($700 million, in fact), they’ll be the first to go. The company plans to close up to 225 stores in North America by the end of 2015. Staples has also initiated a multi-year cost savings plan which is expected to generate pre-tax cost savings of approximately $500 million a year by the end of 2015.
So what does this have to do with Barnes & Noble?
Remember last January when B&N let slip that they plan shutter 20 stores a year for the next decade? A story in the WSJ caused a shitstorm of negative press in the blogosphere when a senior manager revealed B&N had plans to shrink for the next decade.
At the time it seemed reasonable to freak out over the news, but in light of recent news from other retailers I think it might have been a mistake. After Tuesday’s news about Radio Shack and today’s news about Staples, I think we may have over reacted to the report.
I still think B&N should not have let that remark slip, not given the holiday season they had just had, but in their defense it now appears to have been blown out of proportion.