Chicago-based Fitch Ratings has downgraded its assessment of Framingham-based Staples due to a reported decline of core office supply sales and weak business technology product sales.
Fitch lowered its long-term default rating from ‘BBB’ to ‘BBB-‘, and. gave the company a negative rating outlook As of Feb. 1, , Staples had $1.1 billion of debt outstanding, Fitch said.
The company said the downgrade reflects Staples’ âweak sales and margin trendâ in core office supplies (57 percent of Staples’ 2013 sales, half of which is paper, ink and toner), and business technology products (15 percent of sales).
Fitch said the declining performance also stems from competition from online retailers, persistent weakness in the company’s international segment and the challenging macroeconomic environment, which Fitch said could persist over the medium term.
With more than 70 percent of Staples’ product mix under secular pressure, Fitch expects revenue to contract by 3 percent annually in 2014 and 2015. As a result, profits are also expected to fall in 2014 and 2015, Fitch  said.
