Office Depot's Warning Shot

Retailer revises its fourth-quarter forecast
Posted November 9, 2000

Office Depot (Delray Beach, Fla.), has altered its fourth-quarter sales forecast, warning that same-store sales may drop to the "negative mid-single digits" this year. The office-supply chain also announced it would incur a $2 million charge to consolidate 24 customer-call centers into seven larger service centers.

In July the company said it expected fourth-quarter sales would be no worse than flat, but weak computer equipment sales, higher warehouse costs, more competition and adverse foreign currency exchange rates, forced it to revise its prediction. Throughout the next 12 months, the retailer will sustain $4 million in expenses to move and retrain its customer service representatives.