Office Depot Posts Quarterly Loss

Atlanta Office Depot Inc. reported a second-quarter loss on Wednesday as declining spending by smaller businesses and retail customers hurt sales.

The company had a loss of $2 million compared with earnings of $105.6 million a year earlier.

Total second-quarter sales fell 1% to $3.6 billion. North American retail sales fell 6% to $1.4 billion, while sales at U.S. and Canadian stores open for more than a year decreased 10%.

Sales in the business-solutions division fell 5% to $1.1 billion. Office Depot said growth among large, national-account customers was more than offset by a 10% sales decrease with small- and medium-size business customers. The company especially noted weakness in smaller business demand in Florida and California, which account for about 30% of the segment's sales.

International sales rose 13% to $1.1 billion.

Office Depot said it recently received an unsolicited offer from its Mexican joint-venture partner to acquire the capital stock in the joint venture owned by Office Depot for $430 million. It added it has not yet taken part in substantive talks regarding the proposal.