I worked a few days covering for my boss in P&M. What a nightmare! I thought that maybe Staples has maybe 2 years left tops, but after experiencing what my boss experiences every week, I worry that the place might not even make it past spring. You can't run a company this way and expect it to even make revenue let alone a profit. It's like driving a car with the engine and transmission both smoking and leaking fluids. Something is going to break! Also, a collapse of Staples could very likely bring down Sycamore or do some real damage to it at a minimum. In the real world you can't own a failing business without it doing damage to YOU. When investors and the public start seeing the cr-p going on here there will be blowback. You could probably take that to the bank.
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Sycamore sold all Staples real estate and then took a $1B dividend payout through a multi-billion dollar refinancing of Staples debt ensuring the company will never be sold. Seems like bankruptcy is their business strategy for Staples. Get massive amounts of money out first then fold.
Staples is the last place I would go to for tech. Retail or commercial
Sycamore and staples have a meeting next week and sycamore is funding of many stores remodeling to top tech, so sycamore is putting money into stores
Must comment. 2008 — 2012 was Staples B2B high point???? Yechhh !!! That was when I got the H out. It was miserable then, must have descended to an even lower level of Hades since I left. How pathetic!
Many of the categories were growing pre SP and if SP had kept leaders in place that knew the business and had a strategic sales mind then the dramatic reductions of people and the shifting of one strategy to another so disruptively would not have been needed. This group has no clue how to run this business and the money they pay out to consultants is ludicrous considering they keep redoing the same plan. They make their money through layoffs and cutting costs out of the business. NR and SG proposed the marketplace concept to stay relevant and grow with the times. Unfortunately with no real marketing, merchandising, or IT to execute it went nowhere. That was before Amazon exploded on the scene. Maybe the consultants can recycle that idea. Oh that’s right. We still have no marketing, merchants or IT. And no true sales leaders to grow sales. Just dial dial dial
I agree that Staples' decline was well before Sycamore bought them; I'd say that Staples' prime was probably back in 2008 - 2012 or so. I just don't see how Sycamore is going to get out of Staples' without losses. Who would give good money for an obviously failing company, especially one in the shape Staples is in? It doesn't matter what investor pundits say about either one, you can't get blood from a stone in this manner outside of fraud.
Sears (where I also worked at years ago) had a similar situation and while Eddie Lambert and his PE circlej--k still exist, he got ran through the gauntlet from what I understand and not many people take him seriously anymore.
Sycamore is not the reason that Staples is just a “shell of a business” now. The decline started many years earlier under the leadership of RS and then SG. They had a wonderful vision for an office supply super store. It was a huge success for many years but we’re committed to retail only. They did not have the foresight to see how online and competition from Amazon would be their downfall, and it really didn’t take long.
Sycamore merely purchased a struggling business at the right time and at a significant discount. Staples stopped growing well before SP came along. The nature of private equity is to maximize their profitability and that have done a stellar job while burying Staples in debt. They would have loved to do another IPO however the business continues to struggle and just can’t get back to a place where someone would be interested in buying it. So they will take what they can get and eventually will bankrupt the company like they did to other retailers under their umbrella.
One can hope. They destroyed a once great company with great leaders. It’s a shell of a business now. I am embarrassed to be a part of it.
Sycamore isn't invincible. A failure of one asset can bring them down under the right conditions. Hedge funds and PE aren't exempt from the laws of mathematics and the real world.
Nah. SP just pocketed $1B by saddling Staples with unrecoverable debt. Their goal is to wring as much money out of the company as possible then file bankruptcy. The practice of taking out a $1B loan out of a company they know they will fold should be illegal but our corrupt federal government ensures these unethical practices strive.
PE firms are structured in a way that the fall of one asset would cause them to only lose out on the investment in that single asset. Their egos would be bruised but their wallets intact. In fact, they could actually come out ahead thanks to how taxes work in this country. The people who lose out are the buyers of their debt from when they purchased the company.
You have to remember that PE charges a company a management fee and can make a company purchase product or lease assets from their own companies, outside of the asset, making them more money. So it does not matter if Staples is profitable, Sycamore is making money along the way. Their exit might not be pretty, but they made plenty of money along the way.
Agreed SP has been making bank off Staples since acquiring it. It’s what they do. Destroying a once great company with great people. It’s a shell of what it was. But the big bucks still going to SP and the top 1 percenters. Everyone else we are not valued or appreciated or compensated fairly when you compare outside. Wake up don’t wait for SP to fall they will move on and do it somewhere else. That’s what they do.
Staples would just be a blip to Sycamore.