[11/3/16] In August, three months after its proposed $6.3 billion merger with rival Staples fell apart, Office Depot announced the departure of CEO Roland Smith and touted the completion of a three-year turnaround plan with four major elements: Accelerating business contracts operations, revamping its North American retail model, cost reductions and returning capital to shareholders.
Office Depot in September announced an agreement to sell its European business to investment firm The Aurelius Group, and now its turning its focus to store closure efforts. The 300 closings mentioned in its Q3 earnings report, first announced in August, are on top of 400 closures already planned since 2014.
While the plan to merge with rival Staples would have created an international office supply juggernaut with an impressive brick-and-mortar presence to neutralize the growing threat posed by online competition, Staples and Office Depot are now once again rivals, each scrambling to figure out what comes next. On a conference call with analystsWednesday, though, Smith insisted that its plans are clear and reiterated a strategy to build business contracts sales and streamline its supply chain in the name of “optimizing and reinventing retail.”
“We believe there are significant additional opportunities to transition to a more effective sales coverage model for accounts of all sizes by balancing the benefits of an inside and outside sales coverage model,” Smith said, according to a Seeking Alpha transcript. “We are pleased with our initial progress in these areas and expect the sales trends in our Business Solutions Division to improve in the coming quarters as we continue to grow our sales pipeline and convert customer commitments into revenue and profit.”