St. Louis Post-Dispatch Consumer Central column
Feb 20, 2013 (Menafn - St. Louis Post-Dispatch - McClatchy-Tribune Information Services via COMTEX) --So what could the merger of OfficeMax and Office Depot mean for the St. Louis region?
Well, it's still early to say for sure. But one possibility is that it could make for an opening for Staples to enter this market, said Edward Jones analyst Brian Yarbrough. Staples is the number one player in the office supplies market, but does not have any locations here.
But there are dozens of OfficeMax and Office Depot locations around town, some of them in close proximity to one another. Yarbrough noted that there are two locations within a couple miles of one another of his home in south St. Louis County.
While the two companies have not yet talked about store closings that would result as part of the deal, Yarbrough said industry folks are expecting 500 to 600 store closings. It remains to be seen which markets are the most over-saturated and where St. Louis would land on such a list.
Meanwhile, Staples has announced a handful of store closings itself and is shrinking the size of its stores, Yarbrough said. But the company has expressed interest in expanding.
"Staples has said they are interested in more stores, but they haven't commented as to what markets," he said.
Overall, Yarbrough said today's merger announcement is good news for this industry, which has been facing steep competition from online retailers such as Amazon and at a time when more business is conducted over email. (He added that Staples is the second-largest online retailer after Amazon.)
"It's over-stored and there are too many players," he said.
Office Depot and OfficeMax have been distant number two and number three competitors to Staples, he said. So the merger will help them find synergies to be a stronger unified player.
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