Staples CEO Ron Sargent is confident that the company’s pending acquisition of Office Depot will present a myriad of synergies that will boost customer engagement.
Staples announced last month its plans to acquire Office Depot.
“We have a lot of experience with acquisitions and integrations,” Sargent said during the company’s fourth-quarter earnings conference call on March 6, according to Seeking Alpha. “And based on our work over the past month, we have even greater confidence in our initial synergy target. We expect to achieve more than $1 billion of net synergies over the three-year integration period and this target is net of investments in pricing to provide increased value to our customers. It is also over and above Staples
current $500 million cost savings plan and over and above Office Depot’s plan to achieve $840 million of integration and restructuring savings on their own.”
Sargent said Staples has invested heavily in ecommerce capabilities and talent to create a better customer experience while improving the quality of its desktop and mobile websites.
“We have also invested in business, customer acquisition, and retention resulting in double-digit growth in our online business customer file at year end,” Sargent explained. “We have expanded our online assortment from 30,000 products a few years ago to well over 1 million products today. We are building scale and credibility beyond office supplies in categories like retail store supplies, restaurant supplies, healthcare supplies, and education supplies products that our customers really need to run their business.”
In the fourth quarter Staples delivered double-digit growth in all categories beyond office supplies for the second consecutive quarter.
“We continue to drive growth in Staples.com with sales up 9% in local currency during Q4,” Sargent explained. “Over the past two years, we have sharpened pricing and implemented dynamic pricing tools to more effectively compete and offer increased value to our customers. In summary, we feel great about the deal and the work we have accomplished over the past month. This acquisition won’t change our strategic priorities, but it will provide us with an opportunity to dramatically accelerate the pace of our reinvention. We will provide increased value to customers. We will build scale and credibility in the wide range of categories beyond office supplies and we will be even better positioned to compete against the large and diverse set of competitors.”