Shop Talk
Retailers, consumers and prices
Check Out Line: Office Supply Blues
Check out more woe for the office supply sector, specifically Office Depot
The retailer warned that same-store sales in North America fell nearly 10 percent during the second quarter and said operating margins would fall more than expected as business conditions worsened. The news sparked a sharp sell-off in the stock as well as those of rivals Staples and OfficeMax.
Recent months have been tough for Office Depot, which earlier this year faced a proxy challenge from a shareholder group seeking to oust Chief Executive Steve Odland from the board. With the weaker second quarter results in view, one analyst raised the possibility that management changes could be in the offing.
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Check Out Line: Staples offers more for Corporate Express
Check out Staples’ higher offer for Corporate Express.
The U.S. office supplies retailer offered to buy the Dutch company for $2.65 billion – up from its previous unsolicited offer of about $2.34 billion — even as Corporate Express is trying to fight off the takeover bid with a bid of its own.
The Dutch company said in May that it would buy French rival Lyreco for about $2.2 billion, creating the largest business-to-business distributor of office supplies in Europe, North America and Asia Pacific.
On Tuesday, Staples raised its offer, contingent on Corporate Express shareholders rejecting the Lyreco bid. Corporate Express said it would carefully review Staples’ offer and respond in due course.
Analysts think the U.S. retailer’s bid might bear fruit this time around, although Corporate Express could still try to delay it.
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Check Out Line: Consumers seek basics; retailers seek mergers
Check out a busy day for retailers as earnings — or losses – poured in from BJ’s Wholesale, Talbots, Charming Shoppes and Brown Shoe.
The “flight to necessities” by the U.S. consumer was on display as BJ’s — which sells food and fuel — posted a 26 percent jump in quarterly profit.
But for businesses steeped in discrection, the quarter was no cakewalk. Talbots posted sharply lower quarterly net profit; Charming Shoppes reported a quarterly loss and Brown Shoe posted a lower first-quarter profit.
With the U.S. environment a tough one to navigate, retailers are looking to add or subtract businesses to put themselves in a better position.
Spectrum Brands announced plans to sell its global pet supply business to a subsidiary of Salton Inc; the Wall Street Journal reported that Barnes and Noble Inc is looking into a possible bid for competitor Borders Group; and Dutch office supplier Corporate Express is seeking to buy French rival Lyreco for 1.4 billion euros ($2.2 billion), as it fends off a hostile bid from U.S. rival Staples.
(Photos: Reuters)
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