Staples Agrees to Buy Office Depot for About $6.3 Billion • Hacker News Board

Re: Staples Agrees to Buy Office Depot for About $6.3 Billion

#41

Post by inmygarage » Wed, Feb 04, 2015, 3:58 PM UTC

onion2k wrote: post #35

inmygarage wrote: post #25

These businesses are most certainly NOT "on their way out". Office supplies is one of the largest categories in ecommerce. Staples and Office Depot are each doing billions in annual sales online. The idea that Amazon has already won in this category is simply not true (yet, but still). Staples did ~$10b in online sales last year and Office Depot did ~$6b. Online only. Staples sells more online in pure dollars than Ap…

Realistically the only way they can go is down. People just aren't even going to buying more of what they sell. The threat isn't Amazon, it's Apple. People are going to continue to use devices more and pens less right up until no one uses pens any more. Also, bear in mind that you're quoting an article from 2013, and Staples stock fell by about 25% in 2014. They've picked up a little since then, but they're not going…

Yes, I agree.

My point is that these business are a lot larger than people realize, and that the phase out is going to be a lot slower than people think because it's primarily enterprise recurring contracts that are powering their sales.

That said, I use the printer at my office maybe 1x/week, so I agree that it's not long-term sustainable. This is why consolidation is a good bet for short-term viability and the deal is a good one for Staples for right now.

Re: Staples Agrees to Buy Office Depot for About $6.3 Billion

#42

Post by onion2k » Wed, Feb 04, 2015, 4:00 PM UTC

hnnewguy wrote: post #37

onion2k wrote: post #35

Earlier quoted context omitted.

Realistically the only way they can go is down. People just aren't even going to buying more of what they sell. The threat isn't Amazon, it's Apple. People are going to continue to use devices more and pens less right up until no one uses pens any more. Also, bear in mind that you're quoting an article from 2013, and Staples stock fell by about 25% in 2014. They've picked up a little since then, but they're not going…

> People are going to continue to use devices more and pens less right up until no one uses pens any more. And what prevents Staples from adjusting their product offerings to lean more towards "devices", and less towards "pens"? Amazon used to sell only books....

Nothing at all, but their past performance of selling pens is not an indicator of how well they sell devices, or if there'll even be a market for selling other manufacturers devices in the future. Staples are very good at repeat sales of core business stationary. That market is not going to exist for that much longer.

Maybe they'll move to a different market successfully, maybe they won't. They wouldn't be the first once successful company to fail as the market changes though.

Re: Staples Agrees to Buy Office Depot for About $6.3 Billion

#43

Post by JoeAltmaier » Wed, Feb 04, 2015, 4:01 PM UTC

onion2k wrote: post #35

inmygarage wrote: post #25

These businesses are most certainly NOT "on their way out". Office supplies is one of the largest categories in ecommerce. Staples and Office Depot are each doing billions in annual sales online. The idea that Amazon has already won in this category is simply not true (yet, but still). Staples did ~$10b in online sales last year and Office Depot did ~$6b. Online only. Staples sells more online in pure dollars than Ap…

Realistically the only way they can go is down. People just aren't even going to buying more of what they sell. The threat isn't Amazon, it's Apple. People are going to continue to use devices more and pens less right up until no one uses pens any more. Also, bear in mind that you're quoting an article from 2013, and Staples stock fell by about 25% in 2014. They've picked up a little since then, but they're not going…

Staples sells devices - pads, scanners, printers. That's a big part of their business.

Re: Staples Agrees to Buy Office Depot for About $6.3 Billion

#44

Post by gnrlbzik » Wed, Feb 04, 2015, 4:04 PM UTC

onion2k wrote: post #35

inmygarage wrote: post #25

These businesses are most certainly NOT "on their way out". Office supplies is one of the largest categories in ecommerce. Staples and Office Depot are each doing billions in annual sales online. The idea that Amazon has already won in this category is simply not true (yet, but still). Staples did ~$10b in online sales last year and Office Depot did ~$6b. Online only. Staples sells more online in pure dollars than Ap…

Realistically the only way they can go is down. People just aren't even going to buying more of what they sell. The threat isn't Amazon, it's Apple. People are going to continue to use devices more and pens less right up until no one uses pens any more. Also, bear in mind that you're quoting an article from 2013, and Staples stock fell by about 25% in 2014. They've picked up a little since then, but they're not going…

Is that disappearing truly due to demand drop off or just because everyone is cutting something off?

Re: Staples Agrees to Buy Office Depot for About $6.3 Billion

#45

Post by ignostic » Wed, Feb 04, 2015, 4:22 PM UTC

inmygarage wrote: post #41

onion2k wrote: post #35

Earlier quoted context omitted.

Realistically the only way they can go is down. People just aren't even going to buying more of what they sell. The threat isn't Amazon, it's Apple. People are going to continue to use devices more and pens less right up until no one uses pens any more. Also, bear in mind that you're quoting an article from 2013, and Staples stock fell by about 25% in 2014. They've picked up a little since then, but they're not going…

Yes, I agree. My point is that these business are a lot larger than people realize, and that the phase out is going to be a lot slower than people think because it's primarily enterprise recurring contracts that are powering their sales. That said, I use the printer at my office maybe 1x/week, so I agree that it's not long-term sustainable. This is why consolidation is a good bet for short-term viability and the deal…

I have some experience consulting with one of these companies, and I know they understand the importance of moving past paper and into things like tablets and ereaders. It's perhaps their primary focus to transition to new tech without confusing existing customers.

I agree it's a good idea for both companies. There's a perception that's perhaps unfair that these companies are complacent relying on paper and ink. These kinds of things are important to their current business, but both companies are more forward-thinking than most people give them credit for.

Re: Staples Agrees to Buy Office Depot for About $6.3 Billion

#46

Post by logicallee » Wed, Feb 04, 2015, 4:39 PM UTC

I think 'about' should be changed to ~ (approximately) because the current phrasing sounds like you're saying, "give or take $100M" like it's nothin'

I'd prefer to see

Staples Agrees to Buy Office Depot for ~$6.3 Billion

to

Staples Agrees to Buy Office Depot for About $6.3 Billion

Re: Staples Agrees to Buy Office Depot for About $6.3 Billion

#47

Post by cptskippy » Wed, Feb 04, 2015, 4:43 PM UTC

onion2k wrote: post #35

inmygarage wrote: post #25

These businesses are most certainly NOT "on their way out". Office supplies is one of the largest categories in ecommerce. Staples and Office Depot are each doing billions in annual sales online. The idea that Amazon has already won in this category is simply not true (yet, but still). Staples did ~$10b in online sales last year and Office Depot did ~$6b. Online only. Staples sells more online in pure dollars than Ap…

Realistically the only way they can go is down. People just aren't even going to buying more of what they sell. The threat isn't Amazon, it's Apple. People are going to continue to use devices more and pens less right up until no one uses pens any more. Also, bear in mind that you're quoting an article from 2013, and Staples stock fell by about 25% in 2014. They've picked up a little since then, but they're not going…

I wouldn't say their market is disappearing because I don't ever think the need for pen and paper will ever disappear. It's definitely shrinking and there's market adjustments occurring but I don't see them ever going away.

Re: Staples Agrees to Buy Office Depot for About $6.3 Billion

#48

Post by philwelch » Wed, Feb 04, 2015, 4:44 PM UTC

inmygarage wrote: post #25

These businesses are most certainly NOT "on their way out". Office supplies is one of the largest categories in ecommerce. Staples and Office Depot are each doing billions in annual sales online. The idea that Amazon has already won in this category is simply not true (yet, but still). Staples did ~$10b in online sales last year and Office Depot did ~$6b. Online only. Staples sells more online in pure dollars than Ap…

The supply room at my work is stocked by Staples. That might be a bigger business than their retail stores. We even use reams of printer paper as monitor risers.

Re: Staples Agrees to Buy Office Depot for About $6.3 Billion

#49

Post by cptskippy » Wed, Feb 04, 2015, 4:46 PM UTC

untog wrote: post #3

Normally I'd be opposed to/worried about mergers like this, but I feel like these businesses are on their way out (certainly in the physical retail world) so this particular merger might not be so bad. After all, they have a lot of competition from Amazon and the like.

Until Amazon offers same day delivery everywhere, office supply stores will have a market. People will always be running to the store at the last minute to get supplies for a project due the following day.

Re: Staples Agrees to Buy Office Depot for About $6.3 Billion

#50

Post by cptskippy » Wed, Feb 04, 2015, 4:50 PM UTC

jknightco wrote: post #12

oddevan wrote: post #8

The weirdest thing to me is they JUST finished the merger between Office Depot and Office Max last year.

Until your comment I hadn't even realized that Office Max had been subsumed. I guess that goes to show how little I interact with those stores anymore.

I worked at Office Max in high school and had never stepped foot into an Office Depot, when I eventually did it was like this uncanny valley feeling because it was so similar to Office Max and yet it clearly wasn't. When they announced the merger it didn't surprise me at all.