Boston, MA 09/03/2014 (wallstreetpr) – Staples, Inc. (NASDAQ:SPLS) is feeling all good these days as Credit Suisse analyst’s suggestion to it for buying Office Depot Inc (NYSE:ODP) in order to keep online retailers at bay, is showing positive results. This is seen as the maximum increase in the time duration of past six years; especially considering cut-throat competition offered by online retailers.
Credit Suisse Analyst Pushed Staples’ Shares High
An analyst working at Credit Suisse, Gary Balter said in his research note that Staples should acquire Office Depot. He also said that acquisition deal would allow Staples to bring down its cost by approximately $1.44 billion, while at the same time, helping it in generating twice more collective operating profit in next three years.
In a telephonic interview with Bloomberg, Balter said that retail is continuously losing its considerable amount of share to fast-developing online businesses. He added that a lot of managements are being either completely ignorant or are shutting their eyes to this, which is why an alarm is needed to help them break their slumber.
Competing with the Online Business
The fact that many online businesses are marking a sharper presence on the Web these days, cannot be ruled out at all. In such a scenario, according to Balter, acquisition of Office Depot by Staples will help the combined company in effectively and efficiently taking on online rivals. However, for this deal, the analyst opined, Staples shall have to shell out a premium of 80% on the shares of Office Depot.
Entire retail industry has started looking out for reorganization and revamping scenario, in light of faster expansion of online companies like Amazon.com, Inc. (NASDAQ:AMZN). The recent restructuring and reorganization was seen when Office Depot merged with OfficeMax Inc (NYSE:OMX).
Earlier in March Staples Inc. (NASDAQ:SPLS) had announced that it would close down close to 225 stores in North America to save upto $500 million.