Office Depot Inc
. (
ODP
) - one of the leading suppliers of office products and services
across the globe, is focusing on smaller format stores and
enhancing shoppers' experience through store renovations. This in
turn, will facilitate the company in improving store sales
productivity.
Following its rationale, the company is relocating its
existing stores with a new and improved store layout. The company
recently announced the relocation of its Arlington store from
2501 E. Randol Mill Road to 780 E. Road to Six Flags St., Suite
210.
Prior to this, the company relocated the Memphis store from
5014 Poplar Avenue to 5510 Poplar Avenue and the Costa Mesa store
from 2200 Harbor Boulevard to 2300 Harbor Boulevard, with both
the stores exhibiting the company's new concept. Moreover, the
company opened two new concept stores, one each in Denver and
Omaha.
Through this remodeling, the company intends to make its
stores more accessible and interactive, with emphasis on
customers' preferences. Moreover, the company aims to downsize or
relocate about 500 outlets into a small or mid-size format. The
company will also shut down 10 to 20 stores in 2013 due to the
expiration of leases. During 2013, Office Depot plans to downsize
or relocate about 100 large size outlets. Maximum number of
outlets will be remodeled into a smaller format size of 5,000 to
7,000 square feet and the rest of the stores will range between
15,000 and 17,000 square feet.
Further, the company is contemplating to strengthen its global
footprint and reviewing capital-efficient opportunities to expand
its reach in Eastern Europe, Asia and South America. The company
believes that India and China will provide significant growth
opportunities.
Currently, we maintain our long-term 'Neutral' recommendation
on the stock. Moreover, Office Depot, which competes with
OfficeMax Inc
. (
OMX
) and
Staples Inc
. (
SPLS
), holds a Zacks #3 Rank that translates into a short-term 'Hold'
rating.
OFFICE DEPOT (ODP): Free Stock Analysis
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OFFICEMAX INC (OMX): Free Stock Analysis
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