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Staples shares drop on restructuring

FRAMINGHAM, Mass. (AP) -- Shares of Staples Inc. fell on Wednesday, falling sharply a day after the office supply retailer said it is speeding up closing some stores. It pared back some of its decline in afternoon trading.

The Framingham, Mass.-based company said Tuesday it would close about 15 of its U.S. stores earlier than expected and plans to close 45 more stores as well as some delivery businesses in Europe.

The office products company also says it will invest more in its online and mobile efforts and will expand the product assortment that it offers to its business customers.

Shares fell as much as 5 percent to $11.09 in morning trading. But by midafternoon, its shares were down only 24 cents, or 2 percent, to $11.45. Shares had been down 15 percent since the beginning of the year.

Staples is trying to adapt to the evolving needs of its customers. Last month the company reported that its second-quarter net income fell as sales of computers, software, and basic office supplies softened. Computer sales have been pressured by the introduction to many offices of the computer tablet and other mobile devices. Traffic is also down at Staples' stores and Europe continues to be a weak spot.

Jefferies analyst Daniel Binder said in a note to investors that the restructuring is consistent with his expectations. He said shares are not likely to rise much as sluggish job growth, weak office supply spending and a lack of consolidation in the industry weigh on revenue."

He kept his "Hold" rating on the stock.