Chairman and Chief Executive Officer Michael Feuer told analysts Monday "the halcyon days of growth are over" and the effects will be seen in Office Max's real estate strategies. Besides cutting its list of 2001 new store openings in half, the company is cutting the size of its new stores by 3,500 sf and plans to play "hardball" in lease renewal negotiations with landlords. "We will have many, many stores where we'll be negotiating new leases, and we will be looking at smaller stores," Feuer said.

Of the 46 Office Max stores already in the process of closing within the next 90 days, nine are in California and six are in New York. Also hit were Florida (five) and Louisiana (four). The company is holding off a decision on the remaining four store closings.

The company announced Monday it will take a one-time charge of $111 million in the fourth quarter to cover the costs of store closings and lease dispositions. The cost was driven up, company officials say, by store closings announced recently by other retailers. That will mean it will take longer than expected to dispose of their stores and leases to avoid gluts on local market.

"The race for store locations has ended," Feuer declared in a conference call Monday with analysts. "It doesn't matter how many stores we have. It matters how profitable and productive they are."

Feuer said the company is leaving 23 smaller markets that may be better served by the company's web site than a store. Most of those had an Office Max as well as a store by one of the company's major competitors. "Some of this small-town expansion has been irrational," Feuer said. "If that means that we've blinked first, we certainly did that for profitability."

Instead of adding 50 stores in 2001, Office Max will open less than 25, Feuer said, with the other 25 likely to open in 2002. "The vast majority of the new stores are in existing Office Max markets, such as Los Angeles, where we're closing stores but opening new ones in stronger, better locations," Feuer said.

Closing in California will be stores in Anaheim, Garden Grove, Lompoc, Montclair, Ontario, Rancho Cordova, Richmond, Santa Maria and Torrance.

In addition, Feuer said new Office Max stores will be 15% smaller than existing stores at 20,000 sf. The smaller size should not be evident to the consumer, Feuer said, because the space savings comes from the need to carry less inventory with the company's just-in-time supply system. "What we took out was dead space," Feuer said.

The closings followed an evaluation of the company's real estate needs conducted last year, as well as more stringent profit and production requirements on each store.

In New York, stores in Amsterdam, Troy, Selden, Huntington, Staten Island and Hauppauge will close. Florida closings will hit Boca Raton, Pembroke Pines, Pompano Beach, Tallahassee and Vero Beach. The Louisiana closings are in Alexandria, Baton Rouge, Kenner and Monroe.

Three closings are in Michigan -- Benton Harbor, Monroe and Southfield – as well as Texas -– Midland, San Marcos and Wichita Falls.

Office Max is closing a store in Philadelphia as well as Whitehall, PA. States losing two Office Max stores also include Indiana (Clarksville and Evansville), Kentucky (Bowling Green and Owensboro), Ohio (Cincinnati and New Philadelphia) and Oregon (Medford and Salem). Other closings will be in Little Rock, AR; Danvers, MA; Hattiesburg, MS; Salem, NH; Oklahoma City, OK; and Superior, WI.