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Businesses The Almighty Buck News

Staples To Buy Office Depot For $6.3 Billion 105

An anonymous reader writes: Today Staples announced plans to buy Office Depot in a deal worth $6.3 billion. This is a huge consolidation within the office supply industry. Office Depot and OfficeMax were the second- and third-biggest suppliers when they merged in 2013. Adding those to the enormity of Staples would effectively bring the U.S. under a single office supply chain. "The move is expected to draw scrutiny from the Federal Trade Commission, though regulators have been increasingly willing to approve retail mergers in light of burgeoning e-commerce competition. ... This isn't the first time Staples has tried to buy Office Depot. In 1997, the FTC derailed Staples' acquisition of its rival as anticompetitive. By 2013, though, the agency's view had shifted. When the FTC allowed Office Depot to buy OfficeMax, it said the advent of online retailing ensured competition in the market for office supplies. Consumers today also rely more heavily on big-box chains such as Wal-Mart Stores Inc. for office products, the commission said."
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Staples To Buy Office Depot For $6.3 Billion

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  • by Anonymous Coward on Wednesday February 04, 2015 @12:11PM (#48980057)

    They'll just push the Easy Button and it will fly through the FTC, right?

    • by q4Fry ( 1322209 ) on Wednesday February 04, 2015 @01:41PM (#48981065)
      New company slogan: The Only Button.
    • The fact that according to OP the FTC has "changed its position" has no bearing on whether FTC should change its position. Monopoly is monopoly, and there is nothing in society or the economy that has changed that makes it any less bad today than it ever was.
      • by rtb61 ( 674572 )

        Monopoly or no monopoly, larger corporations have proven to be very unhealthy for society, democracy and the economy. There should really be a limit upon how large they get. Seriously, governments should be considering strangling wall street to death in favour of rebuilding main street.

      • by unitron ( 5733 )

        What monopoly?

        The monopoly happens when Staples, Office Depot, and Office Max banded together still aren't strong enough to survive the onslaughts of Wal-Mart/Sam's and Costco on the B&M side and Amazon (and maybe a little Quill) on the web side, and now there are 3 more empty buildings in town to keep company the places that used to be local hardware stores and lumberyards before Lowe's and Home Depot came to town.

        • The monopoly happens when Staples, Office Depot, and Office Max banded together still aren't strong enough to survive the onslaughts of Wal-Mart/Sam's and Costco on the B&M side

          2 of your 3 examples are not even retail stores.

          And I'm not going to boo-hoo competition from Amazon or Quill. Montgomery Ward and Sears became mail-order powerhouses more than 150 years ago. Nothing has changed except for the way in which the catalogs are delivered and payments are made. Everything else is still THE SAME.

  • There go the prices on toner and paper.
    • Re:Great (Score:4, Insightful)

      by MightyYar ( 622222 ) on Wednesday February 04, 2015 @12:25PM (#48980193)

      How so? There is a lot of competition in this space. In the Northeast you are probably familiar with WB Mason, which does not use the retail store model. If you are a consumer, Walmart sells toner for most home printers (and obviously paper as well). For businesses, there are plenty of "Dunder Mifflins" out there. Costco, Sam's Club, etc. And then there is the explosion of internet-only office supply companies.

      • I'm usually strongly against anything that reduces competition, but Staples and Office Depot merging seems like a shrug off in this market. Neither seems like a business on the upswing nor are there big barriers to entry for selling the types of products they sell. If anything I would be concerned that the merger costs and failure to integrate the businesses alone are going to kill both companies and reduce competition in that way.
      • by jbengt ( 874751 )
        I wonder which of the stores in my neighborhood is going to close, the Office Max, or the Staples about a half a mile away?
      • by afidel ( 530433 )

        Amazon with Prime is another serious competitor.

        • Amazon in the past ten years has changed a lot of retail. Prime is ten years old now.

          I can get printer ink delivered either the next day, or the day after for less than the cost of Staples, and there is no order min.

          So a $15 ink cart shows up just when I need it.

    • Re:Great (Score:4, Insightful)

      by darkmeridian ( 119044 ) <william.chuang@g[ ]l.com ['mai' in gap]> on Wednesday February 04, 2015 @12:38PM (#48980305) Homepage

      I am a small business owner, and I have to say that this is not the case. The Internet is the great equalizer. I can buy toner and paper online from NewEgg, Amazon, Costco, W.B. Mason, or Walmart. If Staples decided to jack up the prices, then I'd simply order somewhere else. I don't like splitting up my vendors, either. If I order toner and paper from one company, then I'm usually going to take my coffee and other stationery business somewhere else. The vendors all know this so they're always trying to use paper as a loss-leader to get your business on the other items.

    • by Lumpy ( 12016 )

      If you planned ahead you bought that online already. Far better prices on paper and toner Via Amazon plus I dont have to carry it. The fedex guy does.

  • by Press2ToContinue ( 2424598 ) * on Wednesday February 04, 2015 @12:17PM (#48980107)

    enormity
    inôrmd/
    noun
    1.
    the great or extreme scale, seriousness, or extent of something perceived as bad or morally wrong.
    "a thorough search disclosed the full enormity of the crime"
    2.
    a grave crime or sin.
    "the enormities of the regime"
    synonyms: wickedness, evil, vileness, baseness, depravity

    • If you had clicked the "show more" button you would have gotten to:

      enormity
      inôrmd/
      noun
      noun: enormity; plural noun: enormities
      1.
      the great or extreme scale, seriousness, or extent of something perceived as bad or morally wrong.
      "a thorough search disclosed the full enormity of the crime"
      (in neutral use) the large size or scale of something.
      "I began to get a sense of the enormity of the task"
      synonyms: immensity, hugeness; More

      • outrageousness, monstrousness, hideousness, heinousness, horror, atrocity; villainy, cruelty, inhumanity, mercilessness, brutality, savagery, viciousness.

        Wiktionary states: Enormity is frequently used as a synonym for "enormousness," rather than "great wickedness." This is frequently considered an error; the words have different roots in French, and radically different accepted meanings

        As far as I can tell, the vernacular usage of enormity to which you refer is a rather recent addition to the definition, an

        • As far as I can tell, the vernacular usage of enormity to which you refer is a rather recent addition to the definition, and first came into usage during the media coverage of Bush Jr's lavish inauguration, during which reporters referred to the "enormity" of the proceedings.

          Perhaps you might just try a basic internet search and you might find out how wrong you are [arrantpedantry.com].

          Your "incorrect" usage was first recorded in the late 1700s and in recent decades constitutes roughly 75% of all occurrences of the word. This prescriptivist battle was likely lost more than a half-century ago. Heck, I remember Obama using the "wrong" meaning (i.e., hugeness) in his inaugural address.

          I only use the word to mean a "great evil," but pretending that it only means that or that the "hugeness" thing

    • Typically "enormous" appears to be used in the sense of "very large", and "enormity" in the sense of "very evil". I rarely see "enormity" used to mean "great size".

  • Next RadioShack (Score:4, Interesting)

    by Luthair ( 847766 ) on Wednesday February 04, 2015 @12:19PM (#48980127)
    Is anyone else surprised Staples isn't bankrupt? No one ever goes there and the only time I hear about Staples is when a deal site mentions yet another category is on clearance.
    • I'm not surprised. I'm sure they make most of their money on government and corporate contracts. Here in Georgia, at one time, they had the contract to supply the government with office supplies.
    • Re:Next RadioShack (Score:5, Insightful)

      by Primate Pete ( 2773471 ) on Wednesday February 04, 2015 @12:27PM (#48980205)
      As I recollect, Staples does huge business with small and medium companies, mostly on a delivery basis. Having been in their stores, I doubt walk-in customers are a large part of their revenue. One potential outcome here would be for Staples to close its retail locations (they suck) so that that the better-stocked Office Depot can handle individual/walk-in customers while the Staples brand focuses on the B2B market via internet & delivery.

      That said, I don't have a good feeling about the decrease in the number of office supplies stores near my home, which WILL decrease my options.
      • by Burdell ( 228580 )

        I think Staples vs. Office Depot/Office Max retail locations is similar to Home Depot vs. Lowes. In some areas, one is better, while in others, a different one is better.

        Where I live, Staples has multiple locations that are clean, organized, well-stocked, and always have customers. They have copy/printing services, UPS shipping, etc. There's only one Office Depot location, which is dirty, in a way oversized space (so when you walk in the front door, there's about 30 feet of empty space before you get to

    • Is anyone else surprised Staples isn't bankrupt?

      I am surprised. I predicted their demise when they bought the naming rights to the "Staples Center" sports arena in Los Angeles. Wasting capital on such frivolities is often a sign of impending doom.

      • by Anonymous Coward
        Oh. I assumed it was named after Mavis.
    • I was going to say the same thing about our local Office Depot. I go in there maybe once every 1-2 years, and it's always just about empty. And I f it wasn't for their UPS desk, I bet 80% of that already sparse customer base would not be there.

      I've got nothing against this particular company, but I think time has passed them by.

    • Re:Next RadioShack (Score:4, Informative)

      by bws111 ( 1216812 ) on Wednesday February 04, 2015 @12:35PM (#48980281)

      Apparently 'no one' bought $22.7B worth of stuff last year, with EBITDA of $1.46B.

    • Re:Next RadioShack (Score:5, Informative)

      by netsavior ( 627338 ) on Wednesday February 04, 2015 @12:36PM (#48980291)
      A Staples store is a warehouse for their office supply delivery business. The retail presence is more there for brand awareness and a showcase.

      To contrast, Radio Shack is a cellphone kiosk that once sold electronics.

      This is about like wondering how Bank of America can stay in business if nobody uses safety deposit boxes anymore.
    • I think people go there but they don’t spend time browsing. They know they just need printer ink and a ream of paper, and they need them today. There's not much in the way of entertainment or impulse items to distract shoppers and extend their visit time.

      (Personally I enjoy browsing office supplies -- something about the orderly arrangement of useful objects is pleasing to me -- but that's probably not entirely normal.)

  • No way should any company of that size and market share have such buying clout with the supply chain to which they are distributing. And that says nothing even of the consumer perspective.

    • by tnk1 ( 899206 )

      Except that this isn't the 1990s anymore. You can get supplies from all sorts of online distributors and Walmart (of course). There is still competition. Better competition, in fact. We just have the perception that there is this thing called an "Office Supply Store" and that owning all of those means that office supplies are now under a monopoly. The reality is that a specialized brick and mortar supply store like that is a concept that is no longer the most cost effective means of getting office supp

    • This shouldn't be a problem with Staples would be competing with other big freaking businesses. Costco, Amazon, Newegg, and Walmart are all competitors with Staples for office supplies. If Staples decided to jack up the price, then consumers wouldn't wait to move their business. And if Staples wanted to play hardball with their vendors, then the vendors would simply take their business to other outlets. I buy lots of paper, toner, and K-Cups. Hammermill, Brother, and Keurig aren't going to get pushed around

      • Hammermill, Brother, and Keurig aren't going to get pushed around by anyone.

        Don't be so sure. Those UPC barcodes on everything came from Wal-Mart's foisting them off on anyone who even dreamed of seeing their products in the Walton stores.

        There's a lawnmower manufacturer who balked, because they didn't want their quality standards watered down by fiat just so they could be an Everyday Low Price in the Wal-Mart garden shop, but a lot of companies aren't so devoted.

  • by JoeyRox ( 2711699 ) on Wednesday February 04, 2015 @12:24PM (#48980171)
    Or my favorite, "Antique Supply Store"
  • How can you buy something that isn't a thing anymore? Office Depot and OfficeMax merged. Did they only buy half the newly merged company? Did they cancel the merger? Is Staples buying both companies?
    • Re:what? (Score:5, Informative)

      by bws111 ( 1216812 ) on Wednesday February 04, 2015 @12:40PM (#48980333)

      Huh? They merged. The new company is called Office Depot. Office Max no longer exists. What is so hard to understand?

      • by Anonymous Coward

        Office Max still exists as a brand name owned by Office Depot. They never rebranded or changed the signage on the Office Max locations in my area.

        Interestingly, they kept most of the Office Max locations in this area because the Office Depot locations were in old, run-down failed-big-box-store locations with bad traffic patterns and poor maintenance. The Office Max locations here were mostly in the shiny new shopping plazas. They never bothered to rebrand any of them, and their seasonal sales floor signage

  • Just a theory (Score:5, Interesting)

    by Andrio ( 2580551 ) on Wednesday February 04, 2015 @12:28PM (#48980225)

    I think if someone were to create a simulation model of a truly free market with no regulation, and seed it with hundreds (thousands) of little businesses to start with, given enough time, you'll end up single monopoly that controls every industry, service, and product.

    • by tlhIngan ( 30335 )

      I think if someone were to create a simulation model of a truly free market with no regulation, and seed it with hundreds (thousands) of little businesses to start with, given enough time, you'll end up single monopoly that controls every industry, service, and product.

      Generally speaking, that is correct - the end game for a completely free market is monopoly.

      Though, in the retail sector, I'm fairly certain there's plenty of competition in office supplies. Sure for walk-in business there's Staples and Offic

    • Re:Just a theory (Score:4, Informative)

      by RabidReindeer ( 2625839 ) on Wednesday February 04, 2015 @01:36PM (#48981003)

      I think if someone were to create a simulation model of a truly free market with no regulation, and seed it with hundreds (thousands) of little businesses to start with, given enough time, you'll end up single monopoly that controls every industry, service, and product.

      It seems to depend on what the business is. If a business is capital-intensive, commodity-based and can benefit from economies of scale chances are that, yes, a positive feedback loop will be established and, as the old maxim goes, "nothing succeeds like success".

      On the other hand, not all businesses are driven solely on price. Multiple big players exist in such things as fast food and pizza joints, but within the big chains, I'll avoid MacDonalds and hit Burger King because to me McD's milkshakes taste like library paste. And the local neighborhood pizzaria beats Papa John's 20 ways from Sunday. Because what they're selling is a commodity only in broad terms.

      There exist also Natural Monopolies where it's essentially a Buyer's or Seller's Market. A classic example is a product that requires laying down underground cables to individual residences. It's simply not tolerable to have 37 different companies rooting around in the dirt all the time, so the "last mile" belongs to a chosen few.

      Stuff like this is why auto-quacking that The Market Solves Everything makes one look like an idiot. There are so many exceptions even before the big mean government steps in. In fact, a true Free Market is a pretty rare (and often short-lived) bird.

    • If by "no regulation" you mean people do whatever they want (hire professional assassins, etc.), then that might be true, I guess, for commodities markets. You'd have to study the cocaine distribution or heroin distribution "cartels". But in that scenario the corporation itself would have no control against internal theft etc., you may not ever know who's in charge, even civil law would be in question, and you would wind up with chaos (like ISIS or the drug trade).

      If you are just postulating a "rigged" s

    • That's every game of Monopoly ever played.
  • Well, there goes the last decent brick'n'mortar office store, who had previously merged with Office Max. Staples only carries the most base of common office supplies, their inventory was never as diverse as Office Depot. Everytime I looked for something a little different , like Frixion pens, or the Pilot Plumix, when they first came out, there was no sign of them at Staples - "Yeah, we got that" ?? No, no you don't. But the other two always did. Now it's game over, and yet another monopoly has formed
    • There's this awesome invention called "the internet", where you can find exactly what you're looking for and purchase it without ever having to go into a store. It works especially well for times you're looking for specific products instead of just browsing. There's even a great deal of competition and independent sellers that help keep prices down.

      • by jbengt ( 874751 )
        So, last Sunday, when I needed a new mouse, I could have ordered it online and begun to work within the 15 minutes it took me to pick one up at the local Office Max?
      • Nooo... really? When did that come out?
        That's why I often resort to Amazon. But since I have a Staples less than 2 miles from my house, it would be nice if they carried more than 2 brands of pen or whatever.. and I wouldn't have to wait for it.. and pay shipping as well. Same with Home Depot too, Lowes carries all the little odds and ends I can never find at a Home Depot.
  • by paiute ( 550198 ) on Wednesday February 04, 2015 @12:33PM (#48980267)
    I get all my office supplies by stealing them from work.
    • I get all my office supplies by stealing them from work.

      Chances are your office buys its supplies from Staples.

  • by account_deleted ( 4530225 ) on Wednesday February 04, 2015 @12:52PM (#48980467)
    Comment removed based on user account deletion
  • Then 2 became 1.
    And finally 1 goes to 0.

  • Hopefully this means I won't have to drive as far to get my Arc refills.

  • "Consumers today also rely more heavily on big-box chains" Aren't Staples and Office Depot included in the definition "big-box chains"?
  • when staples went to check out office depot was no longer in stock.
  • That was easy!

  • I did not realize until just now that Office Depot and Office Max had merged (or were always the same to begin with).
    So we are left with one major office outlet... Does competition work in any industry anymore?

    Pat

    • "In a dog-eat-dog world, you eventually end up with one very fat dog" - Don't remember who said it, read it on a forum.

  • "That was sleazy."
  • Have we seen any mergers refused in the past 10+ years? At this point if Microsoft wanted to merge with Sony and then buy out Apple I wouldn't expect refusals of any of that either.
  • There's this annoying ad for Staples office supply store on
    tv. I call up directory assistance, get their number, and give
    'em a buzz.

    "Hello, is this Staples?"
    "Yes it is. How may I help you."
    Too eager to please.
    "I was just wondering how you came up with the name of the
    store. I mean, you sell staples, right?"
    "Yes we do. We

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