Staples to Go Private, Buying Time to Retrench

Purchase by private equity firm valued at $6.9 billion

June 29, 2017

Office supply giant Staples agreed to be taken private for an estimated $6.9 billion, a deal that may give the company some time to rethink a business model more in line with the rise of ecommerce.

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Staples by the Numbers

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In announcing the deal, both parties stressed longer term opportunities. Stefan Kaluzny, Managing Director of Sycamore Partners, the private equity firm acquiring Staples, said, “We… are excited about this opportunity to partner with them to accelerate long-term profitability.”

And Staples CEO Shira Goodman referred to the companies' shared “long-term vision.”

The deal price, significantly less than half of Staples' annual revenue, reflects the challenges faced by Staples.  Sales of office and school supplies have been relatively flat for several years, according to data from The NPD Group. In 2016, overall sales inched up 1% to $12.1 billion. Essentially all of that growth came from online sales, which rose 12% last year.

Staples’ ecommerce sales have not kept the same pace. Ecommerce was flat in 2016 after edging lower in 2015.

Meanwhile, the company’s brick-and-mortar operations have dragged, with same-store sales declining over the past five years. And the declines have accelerated—reaching 5% in 2016.

As of Apr 29, 2017, Staples operated 1,541 total stores in North America, with 1,237 stores in the US and 304 stores in Canada, and

The company has pared the number of stores it operates each year for at least the past five years.