Staples Canada closes 15 stores in effort to transition online

Going out to buy ink and paper clips is no longer a good excuse to leave your desk now that another office supply retailer is shutting stores.

Staples Canada will close 15 of its 331 stores in Canada on Wednesday as part of a companywide effort to shift more of its business online and compete with aggressive retailers such as Amazon.ca and the combination of Office Depot and OfficeMax, which merged earlier this year.

Staples Inc. said in March it was planning to close about 225 stores across North America, or about 12 per cent of its bricks-and-mortar locations, as part of a plan to cut costs to boost efficiency.

The company said in August they closed 96 stores across North America in the first half of the year and expect to close about 40 more in the second half. It also downsized and relocated some stores, with a goal of saving US$250 million this year and $500 million by the end of 2015.

The move follows closures of other office supply stores, such as Grand & Toy, which announced in April it would close its 19 locations in Canada to focus on online sales.

“Slow traffic in retail is impacting a lot of retailers,” Staples CEO Ronald Sargent told investors in August, saying the industry is “overstored” in U.S.

“That is driven by the shift to online as well as the decline of paper-based office supplies,” Sargent said, pointing to the company’s restructuring plan.

He said the bricks-and-mortar office supply store isn’t dead, but that changing customer needs will dictate how many should stay open.

“I think our customers are going to tell us how many stores, what size the stores are, the product offering as well as pricing.”

The company said North American same-store sales, not including Staples.com, fell 5 per cent in the second quarter and that sales could continue to suffer this year.

Experts say Staples has itself to blame for not adapting more quickly to the changing retail landscape.

Doug Stephens, a retail consultant and founder of Retail Prophet , says Staples has two problems – both related to technology.

“First, technology is working to marginalize the need for many of the products they sell,” says Stephens.

He says technology, from computers to apps, is reducing the need for making filing cabinets, paper and pens.

More business is also shifting online and Staples needs to keep pace.

“What Staples hasn’t done is repurpose their store locations to be ‘experience centres’ where customers can learn about things like home office set up, cloud computing, data storage, connected home technology, wearable technology,” says Stephens.

“They need to reinvent the office product buying experience to be more about education and experiences and less about file cabinets and reams of paper. If they don’t make this transition soon, I suspect we’ll see more closures in the months and years ahead.”