Dive Brief:
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Mark Cosby, president of Office Depot's North American operations, will leave the office supplies retailer "to pursue other opportunities," according to a recent filing with the Securities and Exchange Commission.
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Cosby is eligible to receive payment of severance in connection with a termination of employment without cause, according to the SEC filing.
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Cosby joined Office Depot in July 2014 to oversee retail, contract sales, e-commerce, merchandising, marketing, real estate and supply chain functions in North America, according to a company press release. The 30-year retail veteran previously served as president of pharmacy operations at CVS Caremark Corp. as well as in executive roles at Sears and Macy’s.
Dive Insight:
This August, three months after its proposed $6.3 billion merger with rival Staples fell apart, Office Depot touted the completion of a three-year turnaround plan with four major elements: Accelerating business contracts operations, revamping its North American retail model, cost reductions and returning capital to shareholders. Office Depot concurrently announced that Roland Smith will retire as CEO, remaining until a new chief is named (an announcement expected by the end of the first quarter of 2017). At that time, the company said it would consolidate the CEO and president roles, anticipating Cosby’s exit.
In addition to questions of who will lead Office Depot moving forward, the firm is still scrambling to figure out its place in an office supplies market facing mounting competition from other segments of retail, including e-commerce. While the merger with Staples would have created an international office supply juggernaut with the kind of impressive brick-and-mortar presence capable of neutralizing the growing threat posed by online rivals, Office Depot and Staples are now once again rivals, each left to fend for itself.
Office Depot bested third quarter expectations with earnings of 16 cents per share, topping analysts' estimates of 15 cents per share. Revenue decreased 7% from the same quarter last year from $3 billion to $2.84 billion, however, missing Wall Street's estimates for $3.49 billion.
The retailer in September announced an agreement to sell its European business to investment firm The Aurelius Group, and now its turning its focus to store closure efforts. Office Depot closed seven stores during the third quarter, and plans to close approximately 125 stores by the end of this calendar year (a reduction of about 2.8 million square feet of retail space), including 65 targeted for closure during the current quarter.
Beyond continued uncertainty in office supplies retail, the company is also battling news that some Office Depot and Office Max stores were using malware-scanning software that recommended expensive yet unwarranted solutions for computer malware infections that don't actually exist, Ars Technica reports. Office Depot has said the company is ending the practice, which it doesn’t condone, and is investigating the matter.