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Staples, the largest U.S. office supplies retailer, will close up to 225 stores in North America by the end of next year because of slumping sales caused by shoppers turning to mass-market stores or going online.
The company's shares fell more than 14 percent on Thursday, after Staples posted weaker-than-expected fourth-quarter results and lowered its profit forecast for the current quarter.
It said it will shut 225 stores of its 1,846 stores in the United States and Canada -- roughly 12 percent.
"Our customers are using less office supplies, they're shopping less often in our stores and more online, and their focus on value has made the marketplace even more competitive," Chief Executive Ronald Sargent said.
Staples said it had initiated a cost reduction plan expected to generate annualized pre-tax savings of about $500 million by 2015.
The company and rival Office Depot have been struggling to keep shoppers from turning to mass market merchants such as Wal-Mart and online retailers like Amazon.com.
Staples has been shifting its focus to new categories such as business technologies, breakroom supplies, and copy and print services from traditional office supplies like paper and toner.