DELRAY BEACH, Fla. — Office Depot Inc., the biggest U.S. office-supply retailer, said it plans to close 70 stores in North America, including five in California, and slash 1,590 jobs, as it warned that earnings for the year will miss estimates.
The company said it will take a fourth-quarter pretax charge of as much as $300 million as it shutters 67 stores in 18 states and three stores in Canada. The closures will include all Office Depot outlets in Cleveland and Columbus, Ohio; Phoenix; and Boston.
The company also will invest $110 million to revamp the chain and to install new inventory-tracking systems at warehouses.
New Chief Executive Bruce Nelson is trying to boost profit by scaling back expansion plans, focusing on top-selling products and building smaller stores. The company and its rivals in the $12-billion office-supply industry, OfficeMax Inc. and Staples Inc., raced to add more stores and eventually faced saturation in many markets, analysts said.
The job cuts include about 1,470 employees from the North American store closings and 120 contract sales workers, a spokeswoman said. That amounts to about 3.3% of the company's work force. Office Depot also is closing six stores in France, eliminating as many as 90 jobs.