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OfficeMax Tests Out New Prototype Store

Smaller stores could lower costs for the struggling retailer


Office MaxLess retail space and a bigger concentration on services could become the model for new OfficeMax (NYSE:OMX) stores.

The office supply retailer has renovated one Milwaukee store to promote an increased range of services for small business owners. Company officials say the new layout is a pilot project designed to see how consumers respond to the changes, the Journal Sentinel notes.

Staples Shares Sink on Sluggish Q4 Results
Staples Shares Sink on Sluggish Q4 Results

While traditional office supply stores are usually between 20,000 square feet and 26,000 square feet in size, the renovated Milwaukee store is just 8,000 square feet. Analysts say that by reducing retail space, OfficeMax could trim expenses. The company operates 900 locations in the U.S., Mexico and Puerto Rico.

A trend toward rising online orders is also reducing the need for retail store space. OfficeMax is looking for ways to boost sales, which have flagged since the economic downturn.

In February, the retailer announced that it would merge with rival office supply retailer Office Depot (NYSE:ODP). However, the combined company would still fall short of category leader Staples’ (NASDAQ:SPLS) sales.

Shares of OfficeMax dipped slightly in Tuesday morning trading.

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