Staples/Office Depot merger blocked by judge

[Brian Lutz]

http://www.reuters.com/article/us-offic ... SKCN0Y12SF

A federal judge blocked the Staples/Office Depot merger on antitrust grounds, ruling in favor of the FTC on the matter. No appeal is expected, and the merger is now off.

[veteran+]

Yay!!

Finally anti-trust laws were applied properly!!!

[wnetmacman]

To me, this was a bad move on Staples' part. They were denied this in 1997; why did they think they would be allowed now?

[klkla]

To me, this was a bad move on Staples' part. They were denied this in 1997; why did they think they would be allowed now?

Because the competitive environment has changed so much since then. Office Depot, Office Max and Staples dominated office supply sales back then but Amazon and Costco have made huge inroads in that market and that is no longer the case. Staples assumed (incorrectly) that the FTC would understand this but they didn't buy it.

[BatteryMill]

Excellent news in the tumultous retail world of the present day. Now we no longer ride on the path to everything being one huge corporation (reminds me of Buy-N-Large from Wall-E)...

I mean, the competition from Wally World/Amazon may be tough, so try to innovate and work out better plans, Staples/Office Depot.

[wnetmacman]

Excellent news in the tumultous retail world of the present day. Now we no longer ride on the path to everything being one huge corporation (reminds me of Buy-N-Large from Wall-E)...

I mean, the competition from Wally World/Amazon may be tough, so try to innovate and work out better plans, Staples/Office Depot.

This. Especially the innovate and plan part. There's no reason why the #1 office supply retailer (which ever one is these days) should be selling pens for more than Amazon.

[storewanderer]

Now for that Walgreens/Rite Aid merger to be blocked... come on FTC.

I wonder what Office Depot will do with the $250 million break-up fee. That is no small sum. Office Depot has been profitable, but it seems like it has been running a bit like a zombie as the merger was in progress. Now that it will need to continue ongoing operations it will be interesting to see what it does.

Rite Aid I do not view as operating like a zombie as the Walgreens merger has been pending. They have continued remodeling stores, continued adding items to their private label, continued advertising. Rite Aid was more of a zombie in 1999-2004 than it is now.

[Super S]

I am glad this has been blocked. As it is, Office Max and Office Depot still have stores in close proximity to one another, and there haven't been many stores divested in my area. I am still puzzled why the closest Office Depot, which opened two years ago, has not caused the closure of an older Office Max, which is in a less than a mile away, which has been open for 10+ years. The Office Max building is a former independent grocery store and I think dates to at least the 1970s, and at least on the outside, is showing its age.

[storewanderer]

I think the stores that are close together are existing for now for lease reasons. When leases come up, they will close overlapping stores.

In Reno we have an Office Max closing for good tomorrow which opened around 1994 (in half of a building built as Pak N Save which was very short lived and then was Phar Mor for a few years until that company imploded). It is about 1/2 mile from an Office Depot that opened around 1996. Office Depot already closed 2 other stores in Reno (one was replaced, one wasn't).

I am not sure if this happened everywhere but during 2015, the Office Max was basically converted into an Office Depot but without the signs being changed. All of the new store brand items, bags, uniforms, etc. were all Office Depot. Office Depot cash registers were also installed. What was funny during the store closing sale was the amount of Office Max brand merchandise still left to liquidate, a lot of old stock obviously.

I was never under the impression the Office Max did much business and was puzzled it stayed open as long as it did. Supposedly the store was profitable and could not come to terms on its lease so it closed.

Lately it is my observation the Office Depot stores are run much better than Staples. The stores seem neater, cleaner, and have more employees than Staples. Something has really happened to Staples in the past couple years and their store operations have become really poor (sloppy, dirty, dusty, messy) at least in Reno and Sacramento areas. Not to mention the prices at both chains are not good.

[pseudo3d]

Even before the merger, OfficeMax and Office Depot did have rather similar merchandise mixes. I do seem to remember OfficeMax had a pretty big selection of office furniture, and when it moved locations in my town to a smaller (but more visible) location, that was the department that got the biggest cuts. I don't think the solution is to attempt to round up the remaining big boxes, because two weaker companies trying to consolidate in a shrinking market is never a sound strategy. I don't think Office Depot/OfficeMax has met with a lot of major success, Albertsons/Safeway is only marginally successful due to management that wants to compete with Kroger despite most of its brands having a poor reputation, and Sears/Kmart, well, that was always a stretch even at the beginning.

They need to do something to make themselves stand out, especially when most of Office Depot's merchandise can be procured at the discounters. They need to do some sort of cross-merchandising with other retailers or other tactics (maybe operating college bookstores--my community college's bookstore sold Office Depot stuff at jacked-up prices). Some 10+ years ago, Office Depot operated "store-within-a-stores" inside Albertsons stores (link). They should look into something like that again.