Itasca, Ill. — OfficeMax plans to close 110 of its 950 retail stores by the end of the first quarter of 2006 in an effort to improve the company’s overall performance.
The office supply chain will also shuts its wood-polymer building materials facility and undertake “other restructuring activities,” some offshore.
Chairman/CEO Sam Duncan described the store closures as “a difficult but necessary step.” The targeted locations, which span the United States, were selected on the basis of performance and growth potential, as determined by a comprehensive review of the company’s real estate portfolio last year, Duncan said.
OfficeMax still plans to open 70 new stores in key markets this year, most of which will employ the company’s new Advantage store prototype format. All told, the chain expects to end 2006 with approximately 887 domestic retail stores.
The company expects to record pretax costs and expenses totaling approximately $141 million as a result of the closings. In connection with the other restructuring activities in the company’s international operations, OfficeMax expects to record pretax costs and expenses of approximately $5 million. In total, OfficeMax expects to record charges of $187 million, including approximately $46 million incurred in the fourth quarter of 2005 and approximately $141 million to be incurred in the first quarter of 2006.
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