YIPPEE!!! – 650 STORES TO CLOSE & 17,000 PEOPLE TO LOSE THEIR JOBS

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Posted on 19th February 2013 by Administrator in Economy |Politics |Social Issues

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This is a story that just warms your heart. It’s a win, win, win. The executives and stockholders of Office Depot, Office Max and Staples are all thrilled with the merger announced yesterday. Bonuses for everybody!!!! Wall Street is ecstatic. No one seems to be mentioning that it was this very same management that ran their companies into the ground by over expanding and wasting billions of dollars over the last ten years. That’s water under the bridge.

This is a perfect story to capture much of what is wrong with this goddamn country. All that matters is stock prices, the wealth of corporate executives, and short run profits.

The reality is that the only way this merger works is if the combined company closes at least 650 stores and fires at least 17,000 middle class Americans. This will be another step on the road to Ghost Mall USA. Have you noticed any Office Max’ or Office Depots in your local strip malls? More developers with vacant rat infested hovels for rent. Who will replace them? No one. We’ll have 17,000 more low skilled workers on food stamps and unemployment.This should do wonders for the blossoming economic recovery.

But how about that pop in their stock prices!!!!

It’s all worthwhile in this warped American dream we are living.

OfficeDepot, OfficeMax merger good for Staples

By Andria Cheng, MarketWatch

NEW YORK (MarketWatch) — A marriage between No. 2 and No. 3 office-supplies chains Office Depot Inc. and OfficeMax Inc. would be good news not only for investors in both stocks, but it turns out those owning larger rival Staples Inc. may benefit as well.

On Tuesday, Staples (NASDAQ:SPLS)  shares surged 15% after the Wall Street Journal reported on Monday its two smaller rivals are in merger talks. Office Depot (NYSE:ODP)  rose 18%, while OfficeMax (NYSE:OMX)  surged 25%.

The office-supplies chains face declining sales and traffic from increased online competition, sluggish U.S. job growth, an oversaturation of stores and digitization of the work space that sapped demand for such traditional products such as paper and ink. A tie-up would help lead to cost consolidation and store closings to make Office Depot and OfficeMax better competitors, analysts said.


Reuters

Staples would benefit, as well. It stands to pick up lost sales from any store closings and any merger-synergy disruptions, they said.

If Office Depot or OfficeMax “failed to execute well, Staples could benefit more significantly,” said Nomura analyst Aram Rubinson, adding Staples also could pick up some sales to business and other contract customers.

He added Staples’ sales stand to benefit by 2% in North America retail and delivery for a minimum potential per-share profit boost of 10 cents a share.

Some analysts said Staples could also buy some stores that may close in markets that are dominated by Office Depot and OfficeMax and it could also hire some departing sales staff from the combined entity.

“We see three winners,” said Credit Suisse analyst Gary Balter.

Sanford C. Bernstein & Co. analyst Colin McGranahan estimated Staples may see an annual per-share profit boost of less than 20 cents, “unless a potential (Office Depot-OfficeMax) merger integration were to go very poorly, thereby generating much more substantial incremental revenues for” Staples.

He estimated for Office Depot and OfficeMax, the value of the synergies could be as much as $2.5 billion to $4 billion, potentially “dwarfing the combined market cap of the two stocks.”

Analysts estimate the two companies could shut 25% to 30% of their combined store base.

“Consolidation is needed in an overstored and secularly declining industry,” said ISI Group analyst Greg Melich.