OfficeMax set to shut down its retail stores

OfficeMax will close its entire retail network later this year. Photo / OfficeMax website

Stationery and office supplies retailer OfficeMax is set to close down all of its stores.

In an email sent to customers, the company said it would close its 14 stores throughout the country and conduct its business online.

The stores would close towards the end of October and result in 55 roles being disestablished, OfficeMax confirmed to the Herald.

"OfficeMax has made the difficult decision to close our retail network as we adapt to a changing market," the company said in the email.

"A retail review reflected the need for us as a business to make some really difficult decisions now, in order to better position ourselves for the future. The trend to increasing online purchasing, as well as changing office and work practices, compounded by Covid-19, means we need to evolve to remain relevant to today's market."

OfficeMax said it was "investing heavily" in its distribution facilities in Auckland and Christchurch to service the move to online-only.

It employs 635 staff nationwide throughout its retail and distribution networks and received $4.4 million in government wage subsidies during the Covid-19 pandemic.

"After 150 years, we remain committed to delivering excellent service to New Zealanders. We are investing heavily in our distribution facilities in Auckland and Christchurch, which will enhance our delivery service to you. We have a large team of over 600 people based throughout New Zealand to service our local communities, and our national and regional based sales teams will continue to work closely with you to provide the best workplace solutions to meet your needs," it said.

Kevin Obern, managing director of OfficeMax, said 55 roles would be disestablished following the store closures.

He said OfficeMax was consulting on redeployment options with these team members.

"This has been a very difficult decision as the stores have been part of our business and local communities for many years, and our priority at this time is to support our team – particularly those team members directly impacted," Obern said in a statement.

OfficeMax has stores in Auckland's Mt Eden and Manukau, Christchurch, Dunedin, Hamilton, Hastings, Invercargill, Nelson, New Plymouth, Rotorua, Tauranga, Wellington Central and Petone and Whangarei.

In 2017, OfficeMax merged with rival stationery company Staples, resulting in the loss of approximately 150 jobs.

The US-based global investment firm Platinum Equity had recently bought Staples at the time and was looking to acquire its main competitor, OfficeMax.

The Commerce Commission granted approval for the merger in 2015.

Retail analyst Chris Wilkinson said OfficeMax was already a strong player in the e-commerce space and its move to an online-only model was a good business decision.

A large proportion of the retailer's business was already conducted online and came from large corporate and government clients, he said.

"The stores have always been more adjunct to the main business," Wilkinson said.

"I think the writing has been on the wall for some time."

The office supply category had been under significant stress as of late, he said.

New Zealand Office Supplies placed into voluntary administration in May despite receiving $240,000 wage subsidy wage subsidies. At the time the administrator said the business was "not as viable as it should have been" prior to Covid-19, but the pandemic had tipped the company over the edge. It was later acquired by NXP.

As the impacts of the Covid-19 pandemic were realised, more retailers were looking to consolidate their retail footprints and move more of their business online, Wilkinson said.