The office supply company saw shares fall in the wake of store closures and consumers buying from online stores.
The Street reported that “shares fell to $7.75 (€7), the lowest since December 1997”, and these are already down by nearly 19 percent, and the report noted that during the past year “stock had shed an astounding 36 percent”. The failure of the merger with Office Depot has left Staples “vulnerable to growing competition from Amazon [and] Walmart”, and the report noted that there was little “enthusiasm on Wall Street”, commenting that due to the company’s “vulnerability” its “financial situation may worsen”.
Staples saw a fall of four percent in the US and Canada in the second quarter, and the report pointed out that executives “pinned the blame on weak store traffic”. Meanwhile the “operating income” for North American stores fell 57 percent year-over-year to $12 million (€10 million), as the sale of tablets and technical accessories, ink and toner cartridges and office supplies all fell and the “same store sales for Staples.com” only rose one percent.
It was noted that the sales for Staples’ North American segment, which transports “office supplies to businesses”, fell 0.2 percent in the second quarter, although there was some success in “promotional products, facilities supplies and breakroom supplies”, which were in part offset by “declines in ink and toner” as well as paper.
The company is due to close up to 50 stores in North America this year as it “attempts to slash costs and restore investor confidence”, and there have been more than 300 stores closed since 2011.