Turnaround in play at Office Depot

Steep cost cuts and merger synergies have helped guide Office Depot (ODP) back to profitability, notes Barron's.

No-nonsense CEO Roland Smith has narrowed the focus of the company. The exec wants Office Depot to pursue the higher margin opportunities presented in business services.

KeyBanc thinks the office supply giant could see EBITDA of $800M per year by 2016 as initiatives play out.

The early innings turnaround has attracted value investors keying in on the potential for ODP shares to more than double.

The wildcard in the mix: The FTC included online competition in a market review related to the merger of Office Depot and OfficeMax. That assessment leaves open the possibility Staples (SPLS) and Office Depot could merge one day without a regulatory roadblock.

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Comments (3)
  • june1234
    , contributor
    Comments (4471) | Send Message
    Unfortunately for them and others there will more cost cutting in our digital age Blockbuster video, Circuit City, RadioShack, Sear's etc , one by one headed to the big box retailer graveyard
    7 Jun 2014, 10:04 AM Reply Like
  • King Rat
    , contributor
    Comments (1819) | Send Message
    To be honest, I can't tell the difference between Staples and Office Depot. They may as well merge.


    The 2 big issues most big box need are ERP systems and employee attitude.
    Most big box retailers fail at both. One that succeeds wonderfully is Costco.
    Costco will stay in business as long as they do what they keep it up.


    Looking online, take Amazon.com. Not even they are making a noticeable profit with their core business. Perhaps the reality is that being a vendor is difficult, whatever your distribution method is.
    7 Jun 2014, 02:32 PM Reply Like
  • Proficiency Post
    , contributor
    Comments (60) | Send Message
    Office Depot is dead in the water. Short term investors will make money from shares doubling after the 800 stores closure and $1.5Bn cuts. The managed services development plans are hollow promises and won't be fulfilled.


    Staples will annihilate them in the marketplace and do not need to consider a takeover.
    9 Jun 2014, 05:59 AM Reply Like
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