This would have Office Depot Inc taking control of the 1,500 retail locations that currently belong to Staples, Inc. This would be a change from a previous merger attempt that would have brought both of the companies together.
The reason that this new idea may work is that adding Staples, Inc.’s stores to Office Depot Inc’s isn’t a major threat. This is due to physical retailers facing struggles in the era of internet ordering. The real problem with the previous merger plan had to do with SPLS’ business of supplying goods to businesses, not normal customers.
A deal is currently in the works for Sycamore Partners to acquire Staples, Inc. for $6.9 billion. Prior to this deal, an unnamed bidder that was likely Office Depot Inc tried to buy SPLS’ retail locations. Sycamore has been clear that it doesn’t have much of an interest in the chain’s retail business and it may be willing to sell it off to ODP, reports The New York Post.
Despite possible efforts to acquire Staples, Inc.’s retail division, Office Depot has been slimming down its own business lately. This includes selling its international operations and closing down unprofitable stores.
Office Depot Inc last reported earnings in May. This saw it surprising shareholders with earnings per share of 22 cents on revenue of $2.78 billion. Wall Street was expecting it to report earnings per share of 12 cents on revenue of $2.71 billion for the quarter.
ODP stock was up 1% as of Monday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.