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16 August 2012 | Kamalpreet Badasha
Both Staples and Office Depot have reported lower than anticipated sales because of a dip in global demand.
Staples’ sales for the second quarter of 2012 were $5.5 billion (£3.5 billion), six per cent lower than expected. In North America the delivery division, which covers business-to-business sales, was at $2.4 billion - a decrease of 1 per cent due to the loss business contracts. Staples’ international operations, which includes Europe and Australia, reported a fall of 18 per cent in sales to $1.1 billion (£0.7 billion). The company is now forecasting full-year sales to be flat as it assumes growth in the US economy will be slow, coupled with demand remaining weak in Europe.
“We continue to build momentum in categories beyond office supplies, but these improvements were more than offset by weakness in computers and core office supplies during the second quarter,” said Ron Sargent, Staples’ chairman and CEO. “We’re also building a plan to reallocate resources, take advantage of our best growth opportunities, and drive increased cost savings.”
Office Depot also saw sales weaken, reporting a drop of 7 per cent in comparison to the second quarter of 2011 with sales reaching $2.5 billion (£1.6 billion). The North American business solutions division, which includes business-to-business contracts for both public and private sector customers saw operating profit fall from being $45 million (£29 million) in 2011 to $40 million (£26 million) this year. It also saw sales fall in its North American stores decreasing 8 per cent compared with 2011. Its international division reported sales of $717 million (£458 million), a drop of 17 per cent.