The Delray Beach, Fla.-based Office Depot (ODP) announced Wednesday it will cut its expansion plans and close 112 underperforming stores in North America over the next three months, reducing the North American store base to 1,163.
Store closures would occur in various geographic regions, including 45 in the Central U.S., 40 in the Northeast and Canada, 19 in the West and eight in the South. In addition, 14 stores will be closed through 2009 as their leases expire or other lease arrangements are completed.
The office products merchant anticipates taking charges totaling between $270 million and $300 million in the fourth quarter 2008 and in 2009 for the store closures. The cash component of these charges is projected to be approximately $40 million over the next twelve months.
Office Depot also said it plans to close six of its 33 distribution facilities in North America and reduce its capital spending plans for fiscal ’09 to less than $200 million from about $225 million, which it had forecast in late October.
The co. has annual sales of approximately $15.1 billion, and employs about 49,000 associates around the world.
Shares of Office Depot rose as high as $2.85, up 11% at midday trading on the NYSE.