A judge recently blocked the office supplies’ giant’s proposed merger with Office Depot, citing a lack of competition in the market once the merger would have been completed.

An increase in online customer conversion did not translate into noticeable online sales gains for office supplies retailer Staples Inc. in Q1.

Staples, No. 5 in the Internet Retailer 2016 Top 500 Guide, does not break out web sales in its financial earnings reports. In its Q1 2016 earnings report, Staples reported sales through Staples.com were flat year-over-year. Staples also reported combined North American and online sales of $2.247 billion, down 5.2% from $2.372 billion last year.

“In the United States, we improved customer conversion in-stores and online, but this was not enough to offset lower customer traffic across both channels,” Staples CEO Ron Sargent told analysts on Staples’ first quarter earnings call, according to a transcript from Seeking Alpha. Sargent did not specify how much conversion improved during the quarter.

This news comes a day after U.S. District Judge Emmet Sullivan explained his reasoning for blocking Staples’ proposed merger with Office Depot Inc. Staples and Office Depot Inc., No. 9, abandoned their merger plans earlier this month after Sullivan sided with U.S. antitrust officials who challenged the combination of the two largest office suppliers, saying it would create an unrivaled giant. The merger was announced in February 2015 and could have created a $15 billion web merchant.

Sullivan blocked the $6.3 billion deal, siding with the Federal Trade Commission, which argued that uniting the national suppliers would harm buyers. Sargent said yesterday there wasn’t enough evidence to prove Amazon.com Inc.’s Amazon Business could provide enough competition in the office supplies market once Staples and Office Depot had joined forces.

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Staples CEO Ron Sargent said in a statement that the company was disappointed by the decision but that it won’t appeal the ruling. The company instead will focus on a strategic plan that includes trying to win mid-market business customers, exploring alternatives for its European operations and cutting costs.

Staples spent $66 million on the recently abandoned merger as well as store closures in the first quarter of 2016.

For the first quarter ended April 30, Staples, reported:

  • North American comparable-store sales, including e-commerce, declined 3%.
  • Overall sales of $5.101 billion, down 3.1% from $5.262 billion last year.
  • Net income of $41 million, down 30.5% from $59 million last year.

Staples earned a No. 5 spot in Internet Retailer’s America’s 50 Best Marketers in E-Commerce, based on an analysis of data on the performance of America’s Top 1,000 e-retailers in four digital marketing channels: paid search, organic search, social and email.

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