Dive Brief:
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Hurt by the strong dollar and soft demand for computers and computer accessories, Staples Friday reported Q4 net sales fell 3.7% year over year to $5.66 billion, missing estimates. The retailer did post better-than-expected profit, but said Q1 sales will likely also dip.
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Meanwhile, activist investor Starboard Value LP, which pushed for the Staples-Office Depot merger in the works, told the retailer in a letter this week that it must “improve” the makeup of its board. Starboard didn’t make suggestions about potential new board candidates.
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And the American Postal Workers Union (APWU) announced Friday that it is working with the AFL-CIO to challenge that merger as monopolistic. The unions have hired a team of lawyers and financial and economics experts for the job.
Dive Insight:
Staples may indeed need the relief and power-in-numbers muscle it could get from a merger with Office Depot, but things along those lines may not sail as easily as many are predicting. The retailer is getting pressure from both its own investors and the unions opposing the merger.
"A Staples takeover of Office Depot would lead to fewer choices and higher prices for consumers, especially school students and parents. If approved, the merger also would lead to more store closings and have an adverse effect on workers. This merger is not in the public interest," said APWU President Mark Dimondstein.