Staples plans to close Office Depot/Max. 1700 store closures in 2016. Official overheard comparing the over taking to when NEC purchased Packard Bell just to gain market share by killing the name brand. Staples, the worlds #2 ecomerce website, plans to gobble up depot (#6) to simply gain more buyers and "multichannel out" to gain ground on Amazon.com. "If Amazon sells it, staples.com will sell it with free next day shipping." Staples has been upfront and honest that it's 10 year plan calls for extensive investment in online sales and 3rd party delivery with only 250-350 "showcase stores". It's recent non-renewal of some tier 1 stores shows Staples making good on their word. It would make sense in a economic sense to not invest hundreds of millions of dollars into turning old 25,000sq/ft OfficeMax stores into Staples infrastructure, Including computers, Rf guns, and signage. Just the thought of the not on Plano merchandise has managers sweating. Better to liquidate.
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Yeah, but Depot was closing down retail stores in mass numbers anyway, well before this proposed merger. Naturally, Staples and Office Depot have a lot of overlapping retail real estate out there. Staples is buying Depot, thus Staples is in the position of strength re: determining strategy going forward. Since both companies were closing store locations before the merger, it would only make sense that this will continue at an increased pace after the merger: would it make sense to have an Office Depot store and a Staples store both open within a few miles of each other after the merger? I mean, don't get me wrong...it's going to suck, particularly for Office Depot management, once the merger starts. You're going to see Office Depot managers making high 5 / low 6 figure salaries getting let go just as fast as the Depot associates in the beginning. The thing of it is, Staples has no reasonable game plan going forward after all the austerity measures are exhausted, other than to copy the Amazon model. But Staples isn't Amazon, and never will be (and even Amazon is a bit overvalued/overrated when you contrast the brand name hype with their actual percentage of marketplace sales). So, 5 years from now, Staples will have kiosk-sized retail outlets and warehouses that ship products to businesses via 3rd party couriers. Those are signs of a company shrinking in a profound way. Whatever. I'm sure the senior executives will pay themselves oversized bonuses and praise each other for being smart businessmen using retroactive reasoning that the company was doomed to fail no matter what they did. It's a wonderful mindset where the logic dictates they bear no responsibility because events were beyond their control but still deserve their $10 million a year regardless. Sadly, it's all too common a groupthink for CEOs in America today.
The ultimate reduction to 250-300 stores also means that they will not need all the SVPs, RVPs and DMs they have now. They are all scratching and clawing to gain a foothold and be one of the few remaining after the retail decimation is complete. So the hostile environment that exists now will just continue to get worse as more stores close and more positions are cut. The funny part is some of them don't even realize this yet.
Phone:
202.326.3100
Bureau of Competition
Federal Trade Comission
600 Pennsylvania Ave
Washington DC 20850
Robert Jones - director
rjones@ftc.go
The proposed merger between Staples and Office Max is a bad idea for employees, employees family, consumers, and the economic climate of the country.
- Staples executives have recently been overheard saying "
Staples plans for 1700 Officedepot closures. Officer compares it to when NEC purchased Pacakrd Bell with sole purpose of Killing competitor".
If this is correct by any number there will be tens of thousands of people loosing their jobs. This will not only hurt the employee it will hurt their families and will be a huge detriment to the US economy.
An average Office Depot / Max store has between 20-30 people. If you multiply that by 1700 stores that is between 34,000 - 51, 000. This doesn't take into account the domino effect that this will have on the economy.
This deal is not here to help consumers at all. Consumers will not have any physical brick and mortar stores to choose from. If Staples doesn't have that chair well you can't go anywhere else there is no longer any competition. So, the customer will be forced to order online if they choose to go elsewhere and wait for shipping. If the customer has a bad experience with Staples they are not able to go anywhere else because there would be no where else to go. If a customer wants a great deal on a product well guess what - that paper that is $2.00 a ream on Amazon is now $8.00 a ream at Staples (no physical competition). That desk that wasn't delivered correctly and was finally delivered a week later but broke customer; deal with it. There isn't anyone else to deal with.
Staples will take ever advantage they can of the consumer knowing that the consumer will not have anywhere else to turn as far as a brick and mortar store.
I am hoping everyone who is in a seat of power to make this decision is looking at this from every angle because this is bad for the economy, bad for the consumer, and bad for the thousands employees who will suffer.
After I get let go in June, I will never ever buy anything from Staples ever again. Will be buying from Amazon.
Now, they just nerd to execute which historically they (execs) have not been able to do. Fail!