

Staples Agrees to Buy Office Depot for About $6.3 Billion - julio_iglesias
http://www.bloomberg.com/news/articles/2015-02-04/staples-to-buy-office-depot-in-deal-valued-at-6-3-billion

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inmygarage
These businesses are most certainly NOT "on their way out". Office supplies is
one of the largest categories in ecommerce. Staples and Office Depot are each
doing billions in annual sales online. The idea that Amazon has already won in
this category is simply not true (yet, but still).

Staples did ~$10b in online sales last year and Office Depot did ~$6b. Online
only.

Staples sells more online in pure dollars than Apple, Walmart or Dell.

This is not Radio Shack.

I think this is a really smart move for Staples.

Source: [https://www.internetretailer.com/2013/05/24/big-and-
getting-...](https://www.internetretailer.com/2013/05/24/big-and-getting-
bigger)

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onion2k
Realistically the only way they can go is down. People just aren't even going
to buying more of what they sell. The threat isn't Amazon, it's Apple. People
are going to continue to use devices more and pens less right up until no one
uses pens any more.

Also, bear in mind that you're quoting an article from 2013, and Staples stock
fell by about 25% in 2014. They've picked up a little since then, but they're
not going to get back to where they were. Their market is slowing
disappearing.

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hnnewguy
> _People are going to continue to use devices more and pens less right up
> until no one uses pens any more._

And what prevents Staples from adjusting their product offerings to lean more
towards "devices", and less towards "pens"?

Amazon used to sell only books....

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onion2k
Nothing at all, but their past performance of selling pens is not an indicator
of how well they sell devices, or if there'll even be a market for selling
other manufacturers devices in the future. Staples are very good at repeat
sales of core business stationary. That market is not going to exist for that
much longer.

Maybe they'll move to a different market successfully, maybe they won't. They
wouldn't be the first once successful company to fail as the market changes
though.

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Retra
I've been hearing that for decades, and while the latest round of technology
is a step in that direction, it is not significant enough to overcome the
advantages of existing office supplies. (Largely because nobody really knows
what those advantages are in a way that can be outmaneuvered digitally.)

How long do you imagine 'that much longer' to be? That sounds too weaselly to
be accurate.

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untog
Normally I'd be opposed to/worried about mergers like this, but I feel like
these businesses are on their way out (certainly in the physical retail world)
so this particular merger might not be so bad. After all, they have a lot of
competition from Amazon and the like.

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wnevets
Its very similar to the sirius/xm merger. Technicality they were the entire
satellite radio market however the competition transcends the transmission
method and was massive.

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oddevan
The weirdest thing to me is they JUST finished the merger between Office Depot
and Office Max last year.

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jknightco
Until your comment I hadn't even realized that Office Max had been subsumed. I
guess that goes to show how little I interact with those stores anymore.

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cptskippy
I worked at Office Max in high school and had never stepped foot into an
Office Depot, when I eventually did it was like this uncanny valley feeling
because it was so similar to Office Max and yet it clearly wasn't. When they
announced the merger it didn't surprise me at all.

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asd
Staples Depot? I wish them luck. On the rare occasion I buy something online
from one of their stores (probably something that generates a loss or wash for
them) and pick it up, it feels like I'm their first customer of the day.

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bane
I have no idea how they keep the lights on.

Whenever I go in, usually during peak business hours, it's unusual if there's
even another customer in there. I'm usually just buying a pack of cheap pens
or something, maybe once every 6 months.

Many moons ago, it used to be an underappreciated place to buy cheap computer
parts, but even SD cards are grossly overpriced these days.

~~~
jonknee
Staples has a shockingly large (at least to me) online business. They're the
second largest online retailer in the US (second only to Amazon):

[http://www.fool.com/investing/general/2014/03/27/staples-
is-...](http://www.fool.com/investing/general/2014/03/27/staples-is-trying-to-
become-amazon-for-businesses.aspx)

~~~
bch
That doesn't make up for their empty retail stores though, unless those stores
really are local warehouses/depots in the scheme of their online operations --
is that their model ? Former retails promoted to faux retail/consumer
warehouses ? Does having that high profile physical presence drive their
online retail, so the costs are worth it ?

~~~
jonknee
Well the "synergies" or "cost savings" associated with mergers like this are
when they shutter stores and lay off the employees. Post merger there will be
less retail stores.

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hbhakhra
This will be interesting to see. Yeah these office supply stores have
competition from online retailers, but I would assume they make a good chunk
of their revenue from corporate/education customers. Since that is their
biggest revenue stream, I wonder how that aspect of the industry would be
affected by the merger.

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vonmoltke
There are plenty of competitors for the large customers. Few consumers have
ever heard of them, though, because they only do large accounts.

Plus, Sam's Club has been on a major push over the past several years to
attract small and medium business customers. They will be a serious competitor
for Staples Depot Max in that segment.

~~~
abfan1127
I really hope they adopt that name, Staples Depot Max!

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anon999967
As someone who works in IT at Office Depot, I can say that the Office Max
merger isn't even close to half way done from a technology standpoint

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cptskippy
If Office Max is still using the same inventory tracking systems they used in
the late 90s then I fully understand why.

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Gaussian
Staples has been well run. Especially its online business. They were
installing Kiva Systems' bots in their distribution centers before Amazon
(which now owns Kiva), and they've consistently squeezed more margin than
others from a category that deals 100% in commodities.

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jfb
Those deck chairs are not going to rearrange themselves.

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ZanyProgrammer
Heh I only go to Office Depot to buy a bunch of what I've found are the best
microfiber cloths, only sold at Office Depot:
[http://www.officedepot.com/a/products/328533/Ativa-
Microfibe...](http://www.officedepot.com/a/products/328533/Ativa-Microfiber-
Cleaning-Cloth-Red/)

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edmanet
From an IT perspective, it means a lot of integration work between the two
companies. So the employees have that to look forward to. I imagine many
Office Depot employees will be jumping ship early to avoid the massive layoffs
at the end of the year.

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brianbreslin
In 18 months we've gone from 3 major national office supply players to 1. What
is driving this? Amazon? Are the old office supply catalogs like Quill still
around?

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bluedino
Staples has owned Quill since 2002.

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jonah
I wonder what they are going to do about store overlap. There is one of each
within three block of my office and I suspect that's not uncommon.

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cauterized
So we now effectively have an office supply monopoly? Ugh.

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dragonwriter
> So we now effectively have an office supply monopoly?

We have a retail office supply specialty chain physical store monoculture, but
actual retail sales of office supplies also take place at non-specialty
physical stores, at non-chain physical stores, and, most significantly, online
(both from specialized and general retailers), and for most transactions
customers easily substitute among those groups. So a single-entity dominating
the brick-and-mortar chain subcategory is hardly a "monopoly".

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utefan001
Wouldn't it make more sense to convert all the stores to microcenters?
microcenter.com

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cptskippy
There's definitely some overlap in their inventories but it might surprise you
to learn that office supply stores also carry office supplies that Microcenter
typically doesn't. Things like mops, cleaners, file cabinets, furniture, chair
mats, and paper.

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logicallee
I think 'about' should be changed to ~ (approximately) because the current
phrasing sounds like you're saying, "give or take $100M" like it's nothin'

I'd prefer to see

Staples Agrees to Buy Office Depot for ~$6.3 Billion

to

Staples Agrees to Buy Office Depot for About $6.3 Billion

