Office Depot / OfficeMax (US)

Office Depot is a leading global retailer of office supplies and equipment. In 2013, it acquired smaller US competitor OfficeMax for around $1.2bn, closing the gap with their shared competitor Staples, still the #1 in the market. In a surprise development, those two rivals themselves announced plans to merge two years later to create a single giant office supplies group. That deal was challenged by the FTC. Staples and Office Depot went to court to argue their case but a judge upheld the FTC objection, forcing them to abandon the plan in 2016. Although concentrated primarily in North America, the group had also by then established a worldwide presence, with operations in more than 50 countries in Europe, Asia and Latin America as either Office Depot or Viking Direct, the UK office supply company it acquired in 1998. Following the collapse of the Staples merger, the group took the decision to focus on the North American market, and the European division was sold in early 2017 to investment company Aurelius. Office Depot now manages a network of around 1,500 large format warehouse stores in the US and Canada, and also has an extensive catalogue, mail order and internet service. For the time being, the Office Depot and OfficeMax banners co-exist. Reported revenues for 2015 were $14.5bn, but will fall to around $11.5bn following the sale of Office Depot Europe. Gerry Smith succeeded Roland Smith as CEO in 2017. Subscribers may access account assignments and contact information. The searchable account assignments database is available to full subscribers to premium services. Click here to access Adbrands account assignments (subscribers only); or see here for information on how to subscribe.

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Who are the competitors of Office Depot? see Retail Sector

Capsule checked 22nd February 2017

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 12th May 2016: Staples and Office Depot abandoned their planned merger after a US court upheld objections by the Federal Trade Commission that it would impair competition. An earlier attempt to combine was blocked by the FTC in 1997. However, both companies claim that the expansion of Amazon into office supplies has created a dramatic new challenge to their business since then. Regulators were unwilling to accept that argument.

Adbrands Weekly Update 10th Dec 2015: The Federal Trade Commission has issued a challenge to the proposed acquisition of Office Depot by rival Staples, arguing that consolidation of the two biggest bricks and mortar suppliers of office products would significantly reduce competition and drive up prices. Yet both companies argue their most damaging competitors are not each other but online rival Amazon. Staples vowed to contest the decision, arguing it is "based on a flawed analysis and misunderstanding of the intense competitive landscape".

Adbrands Weekly Update 5th Feb 2015: Having already reduced from three to two major retailers, the US office supplies market is now consolidating still further to just one mammoth business. Responding to pressure from investors, market leader Staples has agreed to acquire second-placed Office Depot for around $6.3bn. Office Depot itself only completed its takeover of smaller OfficeMax in 2013. Combined sales of the merged group would be around $40bn. An earlier proposed merger of Staples and Office Depot was blocked by regulators in 1997, but the market has changed significantly since then, as specialist suppliers have withered under the competitive assault from Walmart and Amazon, among others. Analysts now expect the proposed combination to be approved with few if any conditions.

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