OFFICEMAX SHUTS DOWN 110 STORES

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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.

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January 11, 2006 at 9:59 AM