*NEWS*OFFICEMAX SHUTS DOWN 110 STORES

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*NEWS*OFFICEMAX SHUTS DOWN 110 STORES

 user 2006-01-11 at 10:00:00 am Views: 68
  • #13762

    OfficeMax Restructures and Shuts 110 Stores
    ITASCA,
    Ill. – OfficeMax Inc., the nation’s No. 3 office supplies retailer,
    said Tuesday it will shut down 110 of its approximately 950 U.S. retail
    stores in the first quarter as part of a restructuring aimed at
    strengthening its business.
    The company also said it will close its
    wood-polymer building materials plant in Elma, Wash., and make other
    moves as part of a shake-up that will result in $187 million in pretax
    charges.
    OfficeMax did not disclose the locations of the stores
    targeted for closure by the end of March or how many jobs would be
    affected. The company will be notifying the stores involved over the
    next week, spokesman Bill Bonner said.
    In a regulatory filing, it
    indicated that all the stores to be closed are superstores, which
    comprise the vast majority of its stores. It also plans to close five
    retail stores in Canada.
    OfficeMax still intends to open 70 new stores this year and expects to have 887 domestic retail stores at the end of this year.
    The
    company has been struggling to keep up with bigger competitors Staples
    Inc. and Office Depot Inc. and also has suffered from internal
    problems. Its largest shareholder, K Capital Partners LLC, demanded in
    November that the board of directors take immediate steps to improve
    its “dismal” financial and operating performance.
    Sam Duncan,
    chairman and chief executive officer since last year, called the
    closings “a difficult but necessary step toward improving our company’s
    overall performance.” He said it resulted from an assessment last year
    of each store’s results and growth potential.
    The company said it
    plans to record pretax costs of about $141 million for the domestic
    store closings, roughly $41 million for exiting the building materials
    business, and about $5 million for restructuring its overseas
    operations.
    About $141 million of the total charges will be incurred
    in this year’s first quarter, while the balance was recorded in last
    year’s fourth quarter, OfficeMax said.
    OfficeMax began introducing a
    new store format recently that signals a shift away from the
    warehouse-style stores that are the industry standard, including
    boutique-like shopping areas, soft lighting and a cafe.