Dive Brief:

• Staples announced Tuesday that CEO Ron Sargent will step down following the office supplies retailer's annual shareholders meeting June 14, when Staples president of North American operations Shira Goodman will take the reins as interim CEO.  
• Sargent, who has been with the company for 27 years, will continue on at Staples through January 2017 as a director and non-executive chairman. 
• Staples did not name a permanent CEO and said it is considering both internal and external candidates for the position. 

Dive Insight:

Sargent’s decision to step down comes just three weeks after a U.S. District Court Judge granted the Federal Trade Commission's request for an injunction against Staples’ $6.3 billion merger with office supply rival Office Depot. Had the deal gained approval, it would have created one of the largest international office supply retailers and built up a defense against the threat posed by Amazon and other online merchants entering the business contracts segment.

Now Staples and Office Depot are once again competitors, both scrambling to determine a path forward. Staples has said it will work to dominate in core office supply categories like ink, toner and paper, and possibly divest its European operations while exploring other acquisitions. The retailer also will endeavor to offer a more diverse assortment of products and services, its director of corporate communications Mark Cautela told Retail Dive in a recent email.

"We will continue to build on our assortment of products beyond office supplies," Cautela said. "We’ll also look to build on our omnichannel capabilities, like buy online pick-up in store and shipping from store... and investing in sharper pricing and enhanced supply-chain capabilities."

Whatever steps Staples takes moving forward, it will do so without Sargent. “Following close collaboration over the past several years, I am confident in [Goodman’s] and the team’s ability to deliver substantial shareholder value,” Sargent said in a press release announcing his resignation.

“I am excited to take on this new role as the Staples team executes our strategic initiatives to drive shareholder value and position Staples for the next phase of growth,” Goodman said in the same press release. “I am confident that we can do so by intensifying our focus on our best growth opportunities with mid-market business customers in North America and in key categories beyond office supplies.”

It won’t be easy. In early March Staples reported that Q4 same-store sales fell 4% year over year, including a 1% decrease in web sales. North American fourth quarter overall sales fell 9.3% to $2.45 billion, due to weakness in sales of business machines and technology accessories, and average order size fell 2% while stores saw a 2% decline in traffic over the prior year. 

“Traffic is the single biggest issue [Staples and Office Depot] face,” Keith Anderson, vice president of strategy and insights at retail intelligence firm Profitero, recently told Retail Dive. “There is no in-store experience good enough to overcome steadily declining store visits.”