Staples Celebrates The Recovery With 225 Store Closures, Sales Plunge

Tyler Durden's picture

Nothing says global 'economic recovery' like a major retailer drastically missing revenue expectations, slashing earnings projections and announcing it will shutter 225 stores nationwide. Staples, the largest US office supplies retailer, hit the triple whammy and didn't blame it all on the weather as the CEO notes "our customers are using less office supplies." Or maybe there are just less office workers? Isolating Staples is a little unfair but as the largest (and most belwhether-ish), it is perhaps time to question the constant meme of escape velocity, improving fundamentals, and cleanest-dirty-shirt growth...


The results:

The company forecast earnings of 17-22 cents per share for the first quarter. Analysts on average were expecting 27 cents per share, according to Thomson Reuters I/B/E/S.Staples' revenue fell 10.6 percent to $5.87 billion in the fourth quarter ended Feb. 1, below the average analyst estimate of $5.97 billion.


Excluding the impact of an extra week in the year-earlier quarter, sales declined 4 percent.


Same-store sales in North America, excluding sales through, fell 7 percent as Staples sold fewer business machines, technology accessories, office supplies and computers.


Revenue at the company's international division fell 13 percent, hurt by weakness in Europe and Australia.

But apart from that - it was great:

Staples Inc, the largest U.S. office supplies retailer, forecast another quarter of sales decline as it loses customers to mass market chains and e-retailers, and the company said it would close up to 225 stores in North America by 2015.


The closures represent up to 12 percent of the company's 1,846 stores in the United States and Canada.


"Our customers are using less office supplies...


Staples said it had initiated a multi-year cost reduction plan that was expected to generate annualized pretax cost savings of about $500 million by 2015.

So less Capex, fewer stores, less sales... time to announce a dividend hike and massive buyback program?

The stock is not 15 month lows... (-16% today)

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Groundhog Day's picture

Lets not forget the 1100 RSH store closings....damn weather

Winston Churchill's picture

Seems it doesn't matter how clean the shirt is when the laundry is on fire.

Chuck Norris's picture

The budget is tight for office supplies.

Whatever you do, though, never ask to see Chuck Norris' three hole punch.

Obchelli's picture

Bullish BTFD All stocks I'm short jumped on news

TheRideNeverEnds's picture

Indeed, supremely bullish news, new highs all around!  


Obamaphones for everyone! 

dontgoforit's picture

Much of it is 'using less and less' office stuff.  I work in an office and buy from Staples (and others) - and our spend on office stuff for around 12,000 employees has been on a steady decline for the last 5 years.  The era of the iPhone, Ipad, paperless data files, etc.  Bound to happen.  The rest of it, the stinking economy stupid.

Dollarmedes's picture

This whole thing is a farce. The statistics are being cooked in order to avoid the realization by the country at large that we never really recovered and things suck. In third-world banana republics, this is usually referred to as a "preference cascade."

The question is: what will be the event that cannot be denied? What is so monumentally fucked up that TPTB cannot sweep it under the rug? What stinky brussels sprout event cannot be covered up with the creamy pile of mashed potatoes USDJPY carry?


Chinese credit implosion, around mid-year?

TruthInSunshine's picture

Staples real problem is that office supplies are not covered by SNAP/EBT cards.

Four chan's picture

shrinking is the new growth in the new amerika. print on.

Miffed Microbiologist's picture

Well, this is no surprise to me. Dragon Lady our new manager has told us all she will no longer fund any office supplies for the lab and if we care to use any we must bring them from home. So Staples has lost our contract. This is purely psychological in that this is such a tiny part of our budget the cost savings is minimal. However, it does promote in fighting which may expose some useful tactical info. God, I love my job.


dontgoforit's picture

Next real change is going to be robotics - jobs will truly be hard to find then.

MeelionDollerBogus's picture

Not if you're programming robots, repairing them or hiring people to do the jobs no robot can do. Robots aren't flexible thinking, aren't flexible in bodies either and the parts are incredibly expensive. The only payoff was mass-producing the same things for a very long time, very large inventory. Once demand for that inventory is gone (like in a recession or depression) there's no place for robots, there's more place for farmers & gardeners, a task very poorly matched to robots.

Miffed Microbiologist's picture

Well said.

I have often wondered what the plan would be when no one could purchase the items produced by robots. The massive increase in efficiency does seem to have an unforeseen end point. One again, we revert to the beginning. What does that say about the entire pointless endeavor ?


MeelionDollerBogus's picture

I'm still fairly optimistic about technology & people, it's worked for the species so far, so as long as we ditch failed business plans of titans and instead learn to DIY the robot thing, we can adapt to markets & make more customized or modular items for lower cost. The problem now, however, is that those parts for actuators & the techniques for truly understanding future evolution of business markets & design for modular production is... beyond most people. Certainly the titans don't care & certainly the common public is too lacking in technical skill. The nearest accomplished is fab@home which is great but not amazing. It's a stepping stone but it can't end there. We'll need things more complex than layering sintered & melted molecules together and we'll need recycling & re-use of parts more clever than grinding/melting it all down to start over as raw feed to the machines.

It just takes too much energy.

I look at circuits & recycling, for example. A lot of gold & silver and even copper are wasted over time in design. All the metal's on the inside. Just imagine if the insulators were mere formable sheets stuck over exposed circuits, almost like a paint but something easily removed, rather than blocks of silicon you'd have to shatter & scrape. Just imagine if you could re-expose all the circuits, layer by layer, and just scrape them off to re-use?

Or if so many modular designs for circuits permitted replacing a clock signal & attaching them together like legos so rather than always having the most compressed format board, you would sacrifice surface area for the benefit of not scrapping the chips & boards at all as you upgrade?

This takes a bottom-up mentality for users & manufacturers, almost an origami-like design for how to assemble the chips in the first place, not something suited to a purely 2D endeavor of photo-resist etching & a culture of users that do not at all accept the buy-and-dispose approach.

That's a lot to ask for but if we can do it everything changes.

How technology evolves is going to have to take a lot of pointers from how nature evolves to be efficient. Proteins fold. DNA coils into strands. Living things consume other living things & directly manufacture their own new organelles, stem cells & put calcium into bones, teeth, etc., we don't need external factories.

Somewhere between is a bridge, or a few of them but it will take both inspiration & a cultural shift.

Miffed Microbiologist's picture

Well, I thought optimism and MDB were mutually exclusive so I have now a reason to celebrate!

As one who worlds with numerous robots in my profession, I will say they have a place. Especially if there is a necessity for high throughput. However, I am continuously amazed at demands it makes on the individual for troubleshooting. When I had done manual extractions years ago, failures were easily diagnosed because the methods were fairly simple with relatively few steps in protocols. Now, though throughput is larger, more possibility of error introduced. Tolerances are in the millimeter for accurate pipeting so calibration of the various planes of the robotic arm is critical. Manual pipeting has no need of this. Timing is another issue so incubation of samples must be coordinated. Therefore, if an error occurs, all samples on the run fail because individual incubation times are disrupted.

The capital outlay for a robotic extraction device is immense. Maintenance is complex with so many moving parts. Service contracts are expensive because they must cover all technical aspects of the device many companies are not willing to share with the users. Lawyers have infiltrated the process as well as I am not permitted to use the DNA/RNA product for any other use except what the equipment manufacture as deemed contractually acceptable.

Technology in this area changes rapidly. So, unfortunately, these instruments are not recycled but trashed. Another waste of energy, time and capital that is not factored in to the cost. We had one instrument that was being scuttled and I broke off the two stirring bars coated in 24 karat gold and took them home. The service guy questioned me when he went to haul it away. I said it didn't know what he was talking about. He admitted to me he always did the same but this was the first time a customer had done so. I just maintained my ignorance and he scratched his head in amazement. I am constantly shocked how inefficient the entire process is. However I will admit I am only speaking about laboratory medical instrumentation. Other industries could be completely different and I may be ignorant on the benefits.

The problem lies in that not everyone has the technical ability to design, operate and maintain this type of complex machinery. What do you propose for the average person who doesn't have such ability? A hundred years ago he could claim some worth to society. Where is his place in our modern world? This is the problem we face as a society today.


MeelionDollerBogus's picture

Yup. Some bastard was too lazy to be able to do asynchronous timing & processing, and too lazy to figure out what rate of cost of trashing equipment & samples is so counter-productive that it hits break-even with the manual method. I'm sure sometimes you can get more samples but I'm betting some situations it's much, much harder.

The "average" person will need to change with evolution regardless, and barring Idiocracy, will need to improve so the prior average will simply die off, and maybe not so simply.

When things really go to shit is when automated processes are actually very bad, prone to error, and no one in management will admit it, no one in tech support has an incentive to fix it permanently & no one who deals with it on a regular basis has the technical knowhow to do it but is easily able to explain how it fucks up the job they are supposed to do, which isn't repairing robots.

"because they must cover all technical aspects of the device many companies are not willing to share with the users. Lawyers have infiltrated the process as well as I am not permitted to use the DNA/RNA product for any other use except what the equipment manufacture as deemed contractually acceptable"

Sounds like a perfect place for open-source to enter.

Too bad it requires just a little more capital outlay than time & knowledge of programming. It will require a good knowledge of robotics & standarized actuators, a good knowledge of synchronous & asynchronous FPGA interfacing with all those actuators because that's what gives the best modular bang for the buck, being able to re-use things instead of scrapping them, and I have no doubt some other custom hardware. It just always is that way but if the design is good it will be so minimal that only a few chips need to be scrapped, not actuators, not arms, not flasks, not the majority of chips & perhaps a little upgrade to the software to match what the newer chips will control & maybe some more actuators.

Really, a properly designed machine shouldn't have you constantly scrambling to re-learn how to do your job. The nature of your job hasn't changed that much, just the demands of the machine in the aim not of doing better science but of cutting cost in dollars, hours & trying to look fancy enough to impress someone who bought/sold the equipment/contract(s).

Just imagine the selling point being "Ya, once we change software or add a new feature, you have to throw out all your equipment. Also, now instead of throwing out 1 sample with a mistake you can throw it all out, they'll all be ruined at the same time!"

Great selling tactic, right? Right.

Miffed Microbiologist's picture

Yes, your assessment is quite spot on. Our original method had the problem with the linearity being too narrow. For hep C patients, most viral loads run between 100k to 50 million. The manual method was linear to 700k. So that meant we had to track pts as they were being monitored and make a wild stab at diluting their serum to, hopefully, get the reading in the linear range. The company came up with a new automated method linear to 70 million that management pounced on. Wow, now they could have a walk away instrument whereas before I would have to manually extract for 2 hours. Also no more pre dilutions! Sounded great on paper but in reality a nightmare for us. This new instrument had a multitude of problems. The new template they had chosen for their internal control was too sensitive to inhibition and numerous samples failed to amplify. I was constantly diluting these samples in hopes to get either a true negative or uncover an inhibited positive. Also the sample required for testing was 2x the amount as before so the phlebotomists we always drawing not enough for me to test in duplicate. Cost for the new reagent went from 30,000 to $70,000. As I know from this horrible experience, instrumentation doe not mean increased efficiency nor does it always translate into cost saving. It has done nothing to curb my natural cynicism or skepticism. Also, there only is so much knowledge I have maintain such a highly technical robot. Without my technical rep to help with applications and my field specialist to help with the robotics I'm dead in the water for serious issues. I like to solve my own problems not be dependent on others so the fascination for my job has waned. I did not enter this field to be a servant to a machine but that is what I have become and there is nothing I can do about it. Even more disappointing to realize the money and waste for all of this is astronomical.


MeelionDollerBogus's picture

It's the same for software. If the people on the ground aren't used as direct & constant consultants then the programmers & hardware designers better already be experts in the field they're assisting with.

Like this silly little notion:

hmm, how about the machine directly sample & test-dilute, before loading the entire batch, and how about the sensitivity of instruments be tested far in advance of deployment so if they are too sensitive or not sensitive enough,they are rejected as are all fully assembled machines that depend only on that type of sensor, so the design itself is dependent on - gasp - tested parts? And field-tested methodology?

Wow. How about that.

It's not the programmer's job nor the robot-engineer to re-design your job because they can't do your job. It's their job to reduce error & cost and it seems they didn't do either. Sure as hell looks like they didn't test it properly in field to find out what you've found out. OR, they did and they lied about it.


Miffed Microbiologist's picture

A lot of the problem in my case is companies do not consult with the actual users before developing product ( I deal with one company that did, and their instrumentation is absolutely stellar). They are aware of field issues so they address these in various releases but their fixes often introduce new errors. The other nightmare is government regulation by the FDA for the equipment manufacturers. This is an absolute disaster. New regs require software to detect any tampering with results by the user to release results with invalid QC. Believe me, there is no problem with microbiologists releasing erroneous results purposefully. I've done this for 30 years in 4 jobs and have never seen anyone dry lab. But the FDA wants the software to prevent this in case it ever DOES happen. So one day I accidentally clicked on one box that changed a parameter. I quickly clicked it back on to no avail. The software shut down and I wasted $3,000 of MRSA reagents and I had to repeat 30 samples. This is the lunacy I deal with daily.

My husband always complains it's so hard for him to design software when he doesn't fully understand how it will be used. He relished the few times he met the customer directly and got technical info before development. Often the redesigns are quite a painful process when management changes direction and I have to deal with a stressed out angry man.


MeelionDollerBogus's picture

Yup. The very concept of programming or making robots for work and having no idea what that work is ... is ludicrous.

Miffed Microbiologist's picture

Well, you must have a drinking or drug habit to get through your day. I myself have banged my head against the wall so many times in frustration it's a miracle I can still function.


MeelionDollerBogus's picture

Plenty drinking but the computer remembers shit for me so it's ok. Reminds me of things, corrects my spelling, finds my TV shows & movies, whatever. Just wish it would dig my snow out for me. I imagine I'll be moving soon but if not I think I'd rig a hose for hot water. It costs in electricity but compared to the physical work & time to do all the digging killing my back it might actually be worth it. Cheaper than paying a neighbour kid to do it.

Miffed Microbiologist's picture

Dear lord I remember those days in Washington! My first winter was -30 below. Damn near thought I'd die. Everyone laughed at me because I fell on the ice all the time. The neighbors cat was killed when they started their car because it had climbed up into the engine compartment to get warm. I was aghast but everyone told me that happens a lot. SoCal girls are clueless about such things. Because I didn't ski I went stir crazy every winter. I couldn't take it. When Mr got a job in San Diego and asked me to marry him, this fish jumped into his boat so fast it nearly capsized. No more frozen water pipes. No more 360s down the road on a hill. No more falling on my butt going down stairs. Funny, most men must put out a lot of cash for courtship but I was just happy going to a crappy little apartment someplace warm.


Harbanger's picture

Hehe.  Hardship is the mother of all good relationships.   I'm only kidding because of your comment but then again, there's a grain of truth in everything I say.

Miffed Microbiologist's picture

More than a grain IMHO. Some of your duels with LTER were pretty spot on I have observed. Tricky to debate that one. The few times I had, I was lucky to escape with all of my appendages still attached.


insanelysane's picture

Lock up your pens and paper when you go to the bathroom.

Dollarmedes's picture

With that avatar, you should call yourself "Two chan!"

camaro68ss's picture

tell me about it, I now have to turn in the my paycheck Envelope after receiving my check so they can reuse the envelope for the following week. We are also using the black side of old documents in the copy machines. Bullish for office supplys  

Winston Churchill's picture

Thats OK until they make you use both sides of the toilet paper.

ElvisDog's picture

All they need to do is to announce a multi-billion dollar stock buy-back program and all will be well....

SheepDog-One's picture

There's an Office Max nearby I stop by once in a while, there's nobody in there whenever I go in.

cbxer55's picture

There's an Office Depot very near me. Same story for that place, odd if there is more than one or two other people there when I'm there. 

Where I work they have office stuff, but it's all El Cheapo. I like my G2 Gel Pens, so buy my own. Buy the large box of 12. I get mooched a lot. 

"Can I borrow your pen?" Never to be seen again. LOL

ss123's picture

Great. Even more empty commercial strip mall buildings available for temp Holloween stores...

Jumbotron's picture

I worked for Office Depot for a short while between 2005-2008.  Saw first hand the beginnings of the collapse right there on the ground.  I knew something wasn't right as customer traffic slowed WAY down after Thanksgiving and Christmas of 2006.  Then came Thanksgiving of 2007.  We opened early at 6am which was an hour later than 2006.  We could have closed the store up for the rest of the day by 8am.  In 2006 we were hopping like crazy until noon until the next wave came in about 2pm and took us all the way to closing time at 10pm.  In 2007....we might have had a dozen people in after the rush by 8 am until closing that night.  By the time I left in the summer of 2008....except for the girl behind the copy station....I would be the only employee on the floor for every department between 7am and 6pm.  No lunch break.....manager always locked away in his office unless something really bad happned.


Just look at Office Depot stock....(remember, Office Depot borged Office Max so now there are only two office chains left) and Staples stock....and tell me where the recovery is.;range=my;c...;range=my...

wallstreetaposteriori's picture

Who needs staples when you have Tesla!  Bulltards away!

CrashisOptimistic's picture

There is no recovery.

There is no market.  There are only QE funded share buybacks and HFT engines.

Don't play.  Find farmland to buy and organize sharecropping.

eclectic syncretist's picture

C'mon CrashisOptimistic! Get optimistic like your moniker. There's going to be a massive recovery in panhandling with all the people coming  off unemployment benefits.  Panhandlers-R-us is expanding so rapidly soon there will be one at every streetcorner in the country!

CrashisOptimistic's picture

You have misunderstood.

A mere crash is optimistic.  What approaches is descent of civilization, in a permanent way.

cbxer55's picture

Been that way in the Oklahoma City area since I've lived here, 2002. I've seen vans dropping people off at the corners in the am, and picking them up in the pm.

Most definitely Panhandlers R Us. I suspect a lot of them are professional panhandlers. Which is why they do not ever get a dime from me.

Miffed Microbiologist's picture

It has really changed in San Diego over the years. It used to be the skinny disheveled tweekers. Now it quite a variety. Some just normal looking people, mixed with the homeless and the scammers. My favorite local one walks to her favorite spot pushing her wheelchair loaded with her casts, cane and arm sling. She puts them on like going to work, sits down for the day with her sympathy sign. When she goes to Starbucks, she leaves her stuff behind. I've been tempted to put it all on and see what I could pull in.

Actually, I gave one guy $5 once. His sign said " why lie, I want a beer". Had to give him something for honesty.


Rainman's picture

Welcome to North Tijuana, senor.

MeelionDollerBogus's picture

I remember doing that once for a panhandler. His sign said "support public fornication!" and he'd (pretend) to jack off under a blanket. It was obviously a joke but it was a novel way to get attention, a laugh & some coin.

DosZap's picture

Don't fergit the 500 Radio Cracks closing also...............musn't leave out them!

Max Damage's picture

More store closings = More QE free money for Banksters, so bullish. Thieving scum

Robot Traders Mom's picture

Bullish for Dunder Mifflin (DMI)...