Office sector sales offer grim outlook for growth

NEW YORK —The severity of the nation’s economic troubles surfaced last month in the sales results of the nation’s leading office products retailers.

At Office Depot, total company sales decreased 7% to $3.7 billion, resulting in a net loss of $7 million, compared to a profit of $117 million the previous year. The decline was more pronounced at the company’s 1,275-unit North American retail division, where sales dropped 11% to $1.6 billion, same-store sales fell 14% and a $12 million operating profit was well below the prior year’s $80 million operating profit.

OfficeMax’s third-quarter sales decreased 9.5% to approximately $2.1 billion, with retail division same-store sales declining 11.1%. Operating profits also declined, dropping to $29.1 million, compared to $45.3 million last year.

Staples’ financial results were not available at press time, but during its analysts meeting, the company said it expected third-quarter same-store sales at its retail operation to decline 8%.

All three companies have implemented expense control measures and supply chain initiatives to reduce store inventory and increase sales of private brands. Store expansion plans also have been scaled back.

Office Depot is evaluating its entire store base for potential closures, and Staples is planning to reduce openings and shrink its prototype. The company plans to open roughly 75 store in North America next year, down from about 110 stores slated for this year. The average prototype size also is shrinking to 18,000 square feet from the current 20,000 square feet.