April 1, 2016
Connect Retail is our weekly column on the sector, authored by veteran CRE writer Ian Ritter.
It looks like Staples could win its bid to snap up competitor Office Depot, despite objections from the Federal Trade Commission (FTC). The $6.3-billion deal will have Staples absorb Office Depot, creating a company of nearly 6,000 stores. This comes after Office Depot merged with OfficeMax in 2013.
A judge is apparently considering throwing out the FTC’s case, especially upon supposed information that the commission tried to get Amazon to lie in the case, saying that the mega retail merger would impact the e-tail giant’s upcoming business venture into the office-supplies space, even though Amazon is already selling such products.
But, the problem with the FTC’s consternation about a proposed Staples acquisition of Office Depot is that one can purchase office supplies virtually anywhere right now. Walmart and Target sell them, and so do dollar stores, drug stores and even major-market grocers.
It’s not as if the “new” Staples would really have a monopoly on office supplies. There are other major chains out there that have just as much buying clout selling this line of products.
The downside, unfortunately, is going to be for the commercial real estate owners of shopping centers. Office Depot already has a slew of store closings planned.
Do you think the merger should go through, and how will the store closings impact CRE?