Staples Canada is planning to downsize 39 of its 330 stores, according to The Globe and Mail. But that doesn't mean the store count will actually drop—Staples apparently just wants to make smaller stores.
The office-supply chain has reportedly contacted landlords and real estate brokers about subletting space from the 39 stores to other merchants in order to reduce operating costs. Roughly a dozen of the stores' leases expire within a year, so Staples could leave those locations when leases expire without paying penalties to the landlords.
One mall landlord holding leases on six Staples Canada locations said the chain pays rents of about $13 per square foot, and the space could potentially generate twice that much from another tenant such as restaurants or dollar stores. That could make exit negotiations easier for Staples.
The Canadian chain's U.S.-based parent, the 1,600-store Staples (NASDAQ:SPLS) chain, said last September that it will cut its North American retail space 15 percent by 2015.
Word of Staples Canada's store shrinkage comes as one of its competitors, the 880-store OfficeMax (NYSE:OMX) chain, has begun opening U.S. stores with a footprint less than a quarter the size of a conventional big-box office supply store. The smaller space will house much less inventory and will devote a significant amount of space to meeting areas and services for small and medium-size businesses. The theory: Those business customers are already buying most office supplies online, and office-supply chains don't need giant stores but should focus on services.
-See this Globe and Mail story
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