Office Depot Inc. (ODP - Analyst Report) , one of the leading suppliers of office products and services, 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 this rationale, the company announced the redesigning of its Salisbury store in North Carolina with a new layout.
Moreover, the company is relocating its existing stores with a revamped layout. It recently announced the relocation of its Daphne store from 6935 U.S. Highway90 to 6900 U.S. Highway90 Suite3.
Earlier, the company announced the relocation of its Arlington store from 2501 E. Randol Mill Road to 780 E. Road to Six Flags St., Suite 210.
Further, Office Depot 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, it opened two new concept stores, one each in Denver and Omaha.
Through this remodeling and relocation, the company intends to make its stores more accessible and interactive, with emphasis on customers’ preferences. Alongside, Office Depot 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. Of these, majority of the 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 to 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. and Staples Inc. (SPLS - Analyst Report) , holds a Zacks Rank #3 (Hold).