Yet another struggling retailer is trying to shore up foot traffic with a unique in-store experience. Staples is offering customers cooperative working spaces and is finding some success with the endeavor.
Staples’ new offering, called Workbar, resembles a tech-heavy upstart in the wake of WeWork’s success in office space sharing. Seven-year-old WeWork’s valuation has skyrocketed to an estimated $20 billion recently after it secured some $300 million in investments from SoftBank Group Corp. (See also: Behind WeWork’s Billion Dollar Valuation.)
The Framingham, Mass.-based Staples is banking on a hip vibe at Workbar – with young workers at their laptops sipping gourmet coffee amid funky art – to offset soft demand and revive its brand. At its first co-working space in Boston, where Staples opened its first location in September, there’s a putting green, skylights and happy hours.
“If you go to most people on the street and ask about Staples they’d go, ‘Oh yeah, the office-products superstore,’” Staples’ new CEO Shira Goodman told Bloomberg. “But the reality is that’s very far from where we are today, and even farther from where we want to be.” Goodman said she expects Staples’ online sales to be 80% of the retailer’s overall sales by 2020.
Staples, with $18 billion in annual revenue after years of declines, recently said it plans to close 70 stores in the U.S. and Canada to reduce costs amid declining sales. Fourth-quarter sales fell 7% from the year prior.
The company closed 13 stores during the quarter and ended the year with 1,255 stores in the U.S. and 304 stores in Canada.
The office supply retailer is also planning to launch a new marketing campaign that will underscore its role as a partner to businesses, including with its co-working space. Monthly memberships to Workbar cost $130. More than 200 people have signed on since its debut in September.
Staples stock is down 23.3% the past year, and down 6% year to date. Staples tried to buy Office Depot in 2015, but that proposal was not approved by regulators.
By Rebecca McClay for www.investopedia.com