Giant retailer gets set free
Steve’s breakdown: Now that Staples doesn’t have stockholders, they are free to do what ever they want. Check into agency relations.
FRAMINGHAM, MA: Following months of speculation that the No. 1 office supply chain was being shopped around, Staples has agreed to be acquired by private equity firm Sycamore Partners for about $6.9 billion in cash.
The deal is expect to close by December pending regulatory and shareholder approval, and comes 13 months after a merger plan with No. 2 rival Office Depot was dashed for a second time by the Federal Trade Commission (FTC).
New York-based Sycamore specializes in consumer and retail investments, with a portfolio that includes such chains and e-tailers as Belk, Coldwater Creek, Nine West, Talbots and The Limited. In a statement, managing director Stefan Kaluzny described Staples as a “truly outstanding enterprise,” citing its “iconic brand, winning strategy, and dedicated and passionate associates who are deeply focused on the customer.”
Kaluzny indicated that CEO Shira Goodman and her management team would remain in place as Sycamore helps accelerate the chain’s long-term profitability.
The partners will have their work cut out for them: Staples lost $815 million in its first fiscal quarter, ended April 29, and both it and Office Depot argued during their merger proceedings that competition from online merchants, big-box chains and warehouse clubs threaten their survival.
But Goodman, in a statement, said Sycamore’s backing “will enable us to drive greater value for our customers and immense opportunity for our business.”
The deal was approved unanimously by Staples’ board, which believes it’s in the best interests of stockholders, Staples and its employees, chairman Robert Sulentic said.