The recent announcement of the merger between office supply giants OfficeMax and Office Depot came as a big surprise with little to no warning prior to the announcement. And while the move makes sense for both entities, I think that there are still challenges ahead on the road to a successful merger and, perhaps even more importantly, creating a successful and sustainable model. In my latest Retail Rap column, I discuss some of the challenges facing OfficeMax and Office Depot and what we can expect to see moving forward.
First, the good news: with both brands struggling for some time now, a consolidation not only makes sense, it may be the best and only way forward. Decision-makers at both retailers concluded (correctly, from my perspective) that they had two problems: 1) too many stores, and 2) store format problems — most of both chains’ stores are simply too large. Clearly they felt that this move gives them the best shot to address both of those core issues.
Check out the full article from my recurring column, Retail Rap, at Chain Store Age.