Specialist
Former SVP at Staples Inc
Agenda
- Trends and developments in the B2B office supply industry, focusing on Staples
- Competitive positioning vs players such as Amazon (NASDAQ: AMZN) and Office Depot (NASDAQ: ODP) and WFH demand dynamics
- Profitability pressures and channel trends
- Medium-to-long-term outlook – potential acquisition of Office Depot’s consumer business and expanded utilisation of delivery network
Questions
1.
Could you share your top-of-mind expectations for the office supplies and business services industry over the next 12-18 months?
2.
How has the industry performed throughout the pandemic and do you expect any longer-lasting or permanent pandemic impacts, considering the dynamic between WFH and returning to office?
3.
What is your growth outlook for retail vs business services, outlining your assumptions for each?
4.
Do you expect the B2B business will ever get back to 2019 rates, and if so, when might that happen?
5.
What do you think of the competitive landscape? How have players such as Amazon taken share from the industry, specifically in office supplies?
6.
How much more expensive is it to buy from a player such as Amazon vs Staples?
7.
Were products such as paper and toner already declining categories, given the proliferation of digital devices and pads, even pre-pandemic?
8.
How is Office Depot positioned relative to Staples B2B, and are there other players we should consider in the competitive landscape?
9.
Office Depot is creating a B2B marketplace business with the team that built Amazon Business. Do you think it will be successful? What are the pitfalls? What are its competitive advantages? What might be its ability to win?
10.
You brought up WB Mason, and it may be sitting as a shell of its former self. Could it be a potential acquisition target for Staples or somebody else in the sector?
11.
What could be a sensible price tag or multiple for the WB Mason business?
12.
What are the top four end-market industries that Staples delivers to and how do you think those sales have been impacted due to the pandemic? Have any of those four been more impacted than others, and how is the company working to rebuild its position in those end markets?
13.
People have left the office again due to the Omicron variant and there are predictions of new waves. You mentioned people will begin to return to the office. However, given some of the impacts to these end markets, specifically the enterprise customers, in a world where perhaps those don’t bounce back to 80-90%, where do we go from here? What is the logical strategy for Staples to take in tackling this issue and trying to get back to being more profitable?
14.
Do you think there’s any way Staples could do a strategic combination or utilise its network in other ways? Does the company’s delivery network ship for other companies or anything similar?
15.
You mentioned utilising its delivery network to ship for other companies is something Staples threw around a lot during your time there, and perhaps finding drivers is one of the major headwinds in that sector right now. What pros and cons were weighed in this decision-making and why do you think the company hasn’t done it?
16.
One driver of industry growth hinges on SMB growth, which was greatly impacted by the pandemic. How might this recover and what are some implications of its rebound for Staples?
17.
Is SMB growth an area where you think Staples is facing Amazon more? You mentioned earlier that Amazon did a good job targeting some SMBs. Is that a potential threat to the SMB business?
18.
How would you characterise Staples’s pricing strategy? How do you expect it to evolve over 2022, including any growth in pricing? How does pricing differ by channel or end market?
19.
What do you think of Staples’s channel strategy, thinking of its focus on e-commerce, digital transformation and how it’s developing on that side of the business?
20.
How badly does Staples want Office Depot’s consumer business? That’s the D2C online plus the retail side of the business. Would that sit well with the company?
21.
Do you think Sycamore has made a public bid for Office Depot’s consumer business? Might it happen and what is stopping it from happening?
22.
How much more runway does Staples have to manage OPEX? Can you think of any levers that can be pulled?
23.
How should we think about Staples’s potential growth and profitability profile over the next few years?
24.
Do you have a sense of the average gross margin difference for office products vs pro products?
25.
What do you think of Staples’ management? How would you characterise its ability to execute, and are there any moves you would question?
26.
What is the best- and worst-case scenario for Staples over the next 12-18 months?
