Office Depot To Close 112 Stores

December 10, 2008 11:39 a.m. EST

Boca Raton, FL (AHN) - Office Depot Inc. announced Wednesday it will close 112 North American stores over the next three months and plans to reduce the number of new store openings next year as it works to cut costs.

The store closings will reduce Office Depot's total locations by about 9 percent to 1,163. The plan calls for 40 store closings in the Northeast region and Canada, 19 in the Western region, 8 in the South and 45 in the Central U.S. area.

The company said it will take charges related to the closing of $270 million to $300 million in 2008 and 2009.

Office Depot now plans to open 20 new stores in 2009, half of the 40 stores the company originally set out to open. The reduction in openings will reduce capital spending in 2009 to less than $200 million, less than the $275 million anticipated for the year.

The company will also shut the doors to six of its 33 distribution facilities in North America. The move comes as part of a plan to efficiently combine its separate supply chain systems.

Office Depot expects the above actions to add $90 million to pre-tax earnings in 2009.

Shares of Office Depot are 7.8 percent higher to $2.62 in mid-day trading.