So Staples first quarter is over with a 39% profit loss from last year. Will this push them to accelerate store closures?
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Just had Ron and board in our market for a couple of days....stayed at the highest priced hotel in town (cheap room is about $500 per night) fly in about 15 people....so with travel, hotel and food, this was easy $100,000 spent for nothing....while stores had to overspend hours to make everything look nice and put on the dog and pony show....day after they leave, back to normal and we are all told we suck because sales are off and now we must pull our hours back in right away. Let them come in and see a real store....MOD and 3 associates covering 24000 sq ft of retail space.
The new changes and demands are all so Ron can get a bonus, despite losing money.
Given that the company is trimming 500 million in operating expenses this year to meet 1.5 billion in loans that are maturing in the next couple of years, while I'm sure the Depot purchase seemed sensible to someone (primarily Starboard Value), the fact that both companies are declining and neither have anything innovative on the boards to counter the decline means that now you'll have two slowly failing businesses with similar antiquated business models and problems tethered together rather than standing apart. So they'll merge, continue to close combined two thousand stores, make all the delivery functions 3rd party, subcontract out their furniture department...and then what? Survive on making small business loans, whatever business-to-business customers they have left after customers get tired of dealing with substandard courier drivers and 2-5 day waits for their orders and whatever sales they can generate out of 2000 mini-stores with kiosk-style ordering? Executive-level management has clearly thrown in the towel and become comfortable with shrinking the company. Maybe this outcome was inevitable anyway. Once you go public with share offerings, eventually majority shareholders will decide it's more lucrative to downsize than grow, particularly since Staples stock peaked 8 years ago and has been declining ever since...and then the company is pressured into undertaking a 'less is more' strategy because of it. When the only significant uptick in stock value you've had is solely resultant from the public prospect of a merger with your main competitor and said merger is one neither of the CEOs stated they even wanted to happen (and was basically a 'do this or else' decree from Starboard), what exactly does that say about those at the helm of the company in terms of strength and ability? Then again, even without the merger there's seemingly no silver bullet (or even a full chamber of bullets) in terms of strategy going forward that can right the ship. The amount of retail stores are seemingly unsustainable re: p & l, the company can't afford to fund their fleet as efficiently on a cost basis vs. turning it over to a courier service...it's easy to criticize, but I'll be damned if I see a viable series of moves that can restore Staples in terms of profitability. Maybe the Depot merger/acquisition does make sense in this instance, because the only move Staples might have left is to buy out their principal competitor so Staples can survive...even if survival is defined in diminished terms.
This is why they are firing and harassing everyone now, to force as many people out as possible beforehand to reduce severance and unemployment payouts.
After the buyout even more will be paid out in severance and to break leases.
But yet there gonna waste billions to purchase OD another failing company. Smart move!!!!