1,000 stores likely to close, as Staples buys Office Depot

Philly.com ^ | 02/04/2015 | Joseph N. DiStefano

[SeekAndFind]

In a move expected to accelerate the shutdown of office-supply stores across the U.S., Staples Inc. has agreed to pay stock worth $6.3 billion to acquire rival Office Depot, which last year absorbed the former Office Max chain. The price works out to $11 per Office Depot share, up from $7.60 on Monday (Office Depot shares started rising Tuesday as deal rumors were reported in the financial news).

"Financially this transaction makes sense and is necessary to the longterm health of these two companies," retail analyst David Strasser told investors for Janney Capital Markets in a report today. Both Staples, which has more than 2,000 U.S. stores, and Office Depot, which has over 1,000, have recently announced store closings as they struggle with online competition from Amazon.com and others. That will accelerate, since roughly half of Office Depot stores are within 5 miles of a Staples.

Strasser expects the merger partners will close 1,000 stores in the next couple of years, slicing $1 billion off the chains' combined expenses. The shutdowns will also reduce the income of America's retail landlords by $350 million/year. Strasser estimates the partners will also cut advertising, currently $1 billion/year ($500 million for each of Staples and Home Depot), to about $600 million.

Staples already has one of the largest online retail operations in the U.S. and has partnered with manufacturers to ship direct, but has had a tough time squeezing profits from digital sales. It could take 9 months to get the deal past the Federal Trade Commission, which may require the companies to sell some stores to other operators; foreign operations could also complicate a final agreement.

[Zuben Elgenubi]

So, Office Depot, Office Max and Staples are now one company. What’s next? Standard Oil coalescing?

[MeshugeMikey]

“....forward”...

“we can can”/

what a bright shining future that Great Leader is accomplishing

[Vigilanteman]

Staples runs a better show with toner cartridge recycling than Office Depot/Office Max. Staples gives you a coupon with a fairly generous time in which to use it. Office Depot requires that you buy something on the spot.

Plus the shipping services with Staples (UPS and USPS) offer more variety than Office Max at least here in our area.

[Alex Murphy]

In a move expected to accelerate the shutdown of office-supply stores across the U.S., Staples Inc. has agreed to pay stock worth $6.3 billion to acquire rival Office Depot, which last year absorbed the former Office Max chain.

PFL

[Alberta's Child]

You could make the case that there is no such thing as an antitrust issue in the retail sector. When a specialty chain’s biggest competitors include Wal-Mart and Amazon, I’m not even sure there’s a need for that chain anymore.

[roofgoat]

soon, just 50 companies total for everything. Synergy is King.

[Gumdrop]

We only have Office Depot in my city, so I think we will not lose a store, but will eventually see the sign for Staples put up overnight.

[Extremely Extreme Extremist]

Is anyone surprised by this?
Who in their right mind would open a 10,000 sq ft store selling office crap and then open another store 5 miles away?
I knew these stores would fold eventually. Now the buildings can be used for other purposes.

[EQAndyBuzz]

“soon, just 50 companies total for everything. Synergy is King.”

Brought to you by the Brawndo corporation. Brawndo, it has electrolytes.

[justa-hairyape]

Yeah. Competition did it. Not the fact that small business is being slaughtered by the Oligarchy.

[ElkGroveDan]

When I order office supplies via Amazon Prime more than half the time I receives them the next day -- first delivery. That has got to be one of the things killing these retail stores.

As someone who used to manage an office and staff, one of the worst things was sending someone out for supplies. It seemed like normally reliable people would be gone forever. Online ordering is really the only way to go for 75% of the supplies you need for an office these days.

[DoodleDawg]

Now the buildings can be used for other purposes.

Like what?

[Fresh Wind]

So now Staples’ prices will be even higher?

[US_MilitaryRules]

When we order stuff from Staples it shows up the next morning from a Staples driver.

[Democrat_media]

So anyone can start their own company to compete against this, online or as a store. What's stopping them? only government can create a monopoly and government is the biggest evil,corrupt , oppressive, monopoly

[dforest]

Government control is easier when there are big monopolies.

[Billthedrill]

Well, the local Staples cut its store in half, moved its product to the smaller piece except for the furniture, which it isn't selling there anymore. It's a little congested, but it opened the other half of the mall slot up to another store. Yes (wait for it) - a furniture store. Mind you, a furniture store in a unit the size of my garage is a little congested too.

This is progress, or so I'm told, but don't quote me.

[bicyclerepair]

I have noticed staples sponsors lots of liberal movies.

[Alberta's Child]

The thing with an office supply store is that 95% of the things they sell are low-cost items that are meant to be used and then either published (in the case of paper or ink) or thrown away. Quality is so unimportant that purchasing decisions are made on the basis of price and convenience. That is a tough business climate for a retail chain.