Office Depot
Office supplies retailer providing business products, technology, and printing services.
PE-OWNED
Acquired by Bain Capital2022-12-16
What Made It Great
Office supply superstore with business services and competitive pricing
What PE Will Likely Do
Reduction in selection of office supplies, technology products, and printing services as Office Depot closes underperforming locations and trims inventory
Decline in in-store customer service and technical support as staffing is cut
Increase in prices for remaining products and services as Office Depot looks to boost margins
Deterioration in physical store conditions and quality of on-site printing/copying services as maintenance is deferred
Expected Timeline
“0 to 6 months months”
Announcements about 'transforming' the business, hinting at store closures and cost reductions
“6 to 12 months months”
First wave of 5-10% of locations closed, reductions in staffing and services announced
“12 to 24 months months”
Continued store closures, product selection declines by 15-20%, visible decline in store upkeep and printing equipment
“24 to 48 months months”
Bankruptcy rumors emerge, more aggressive cost cutting leads to 30%+ reduction in product/service quality and availability
“48 to 60 months months”
Potential bankruptcy, restructuring, or fire sale of remaining assets
Similar Cases
Other companies that followed a similar path after PE acquisition
What You Can Do
Actions
Stockpile critical office supplies and equipment before potential product shortages
Avoid relying on Office Depot for important printing, tech support, or other business services as quality is likely to decline
Be prepared for price hikes on remaining products and services as Office Depot seeks to boost profitability
Alternatives
Employee-owned warehouse retailer
Publicly traded retailer with strong values