Office Depot will close 400 stores, including 150 of them this year as the chain continues its merger with OfficeMax.

Sales soared 60 percent higher in the first quarter of 2014 thanks to the merger, but Office Depot still reported a loss of $109 million or 21 cents per share. That's much worse than Q1 of 2013 in which Office Depot reported a loss of only $17 million or six cents per share.

With the merger, analysts expected the company to report a profit of three cents per share.

The closing of the stores was expected because of many Office Depot and OfficeMax locations being so close to each other. Office Depot finished acquiring OfficeMax in November 2013.

"The overlapping retail footprint resulting from the merger provides us with a unique opportunity to consolidate and optimize our store portfolio, while maintaining the retail presence necessary to serve our customer," Chairman and CEO Roland Smith said.

This year, Office Depot will close 150 stores, and by 2016 it expects the closures will save the company $75 million.

In February, Office Depot warned its sales would likely take a hit this year. The company and other office supply stores have struggled as competition from online retailers and large companies like Wal-Mart increases.

Staples, much like Office Depot, is seeing the need to close stores. Most of Staples' sales come from its website. Staples will close 225 stores by the end of 2015.

Back in 2009, Office Depot and OfficeMax had a combined 2,085 stores. By 2016, that number will drop to about 1,500 stores.

Office Depot hasn't delivered the number of jobs that will have to be eliminated with the closings but said it will try its best to relocate workers to other stores.

Despite the announcement of the closings, shares of Office Depot rose 17 percent Tuesday morning to $4.87 a share.

Smith actually thinks the merger with OfficeMax is running faster and better than expected.