Staples, Inc (NASDAQ:SPLS) – stapling-down profits with e-commerce efforts
It’s been just a couple of days since Staples, Inc (NASDAQ:SPLS) announced a quarterly cash-dividend on the company’s $0.12 per share, common stock. The dividend will be payable on 18 July 2013, to shareholders who are on record on 28 June 2013. Staples sure seems to be trying hard to ensure that it holds the interest of investors. The company had announced its quarterly results on 22 May and the company is not really in the pink of health. However, this is not a staunch indicator that the company is on its way downhill.
SPLS has been very persistent and extremely aggressive with following-up on its plan of trimming its North-American stores. The company says that it is bang on target with its phased-out plan of cutting its number of stores by 40, in 2013. Last fall, the retailer had projected the closure of 30 stores.
Heading towards the web
The Framingham-based company is making a shift, yes, but not necessarily a monumental one. Its store count in U.S and Canada stood at 1,886 stores are the start of the year. However, its efforts go to show that Staples, Inc (NASDAQ:SPLS) is scrutinizing all leases that are approaching a close, very minutely. There is a definite pressure to bring down costs related to real-estate and work on its online presence. Even as dozens of its stores are been down-sized across the country and in Europe, the company is shifting focus to its digital business. Somehow, it seems that’s where everyone in the industry is headed.
Why the urgency?
Currently, less than 50% of Staples, Inc (NASDAQ:SPLS)’s revenue comes from its e-commerce efforts. However, it is no secret that younger customers prefer to access and buy products online. Mobile phones, tablets and PC’s are the new front-offices for most businesses who wish to tap in on the new-generations shopping trends and preferences. Staples has been facing a lot of heat from online players like amazon.com and like Walmart. However, Staples’ problems run deeper than just online competition.
A slowdown in the economy means that the office supplies business has been in the doldrums since the start of the depression. Hopefully with the company concentrating more on its e-commerce unit, Staples, Inc (NASDAQ:SPLS) will be able to garner sizeable profits.