An expected merger between Office Depot Inc (NASDAQ:ODP) with its rival Staples Inc did not materialize as a result of failed regulatory muster. The two have been in talks for the last three months but still did not meet the requirements which will occasion the closure of more than 300 stores of the Florida-based company. The duo, however, tried to challenge the U.S for blocking the proposed $6.3 billion merger, but the federal judge could hear none of it explaining that it would not be in favor of the market.

 The closure of the stores will occur within a period of three years. Apparently, 400 of them have already been closed following the industry’s move to incorporate technology as well as stiff online competition, particularly from Amazon. Office Depot’s proposal to take over the smaller OfficeMax back in 2013 was also disapproved by the U.S. Federal Trade Commission which argued that it would result in higher prices and in return affect the big companies that buy office supplies in bulk.

What next for Office Depot Inc

Apart from its intention of closing various stores, the company has also announced other positive moves. It will endeavor to grow its contract channel, optimize retail operations in North America as well as well as implement multiyear cost reductions. The target is trim $250 million in costs by 2018. However, the company declined to confirm whether any related job cuts was a way of reducing expenses or it was purely a measure to lower overall general and administrative costs.

Let’s explore the company’s performance on revenue and shares

The company’s shares rose 15 cents which translate to 4.7% gaining a $3.44. However, it still fell short of most expectations because its revenue slid 6% to $3.22 billion. According to industry analysts by Zacks Investment Research, the per share earnings were half the expectations. Nonetheless, the sales will still fall given the projected closure of more stores.

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Steve Kanaval: Portfolio Manager/Writer/ Market Analyst Steve began his career in the Trading Pits in Chicago making markets at the Chicago Mercantile Exchange (NYSE:CME) the Chicago Board of Trade and the CBOE in the early 80’s. He ran the Morgan Stanley Derivative Prop Trading for the firm specializing in Index Arbitrage. He continued his career as a Trader/Portfolio Manager for multiple Hedge Funds during the Internet Boom of the 90’s managing large portfolios. Steve is known as an expert in MicroCap Technology Stocks and the emerging Digital Currency markets as a Portfolio Manager for his Family Office. Steve has managed portfolio’s in volatile asset classes for 3 decades as a commodity trader, hedge fund manager and digital currency trader and miner. Steve publishes his views on the asset classes in a public forum and has published more than 10,000 articles simplifying these complex and volatile assets for readers. His work is published on multiple sites including Bloomberg,,, CryptoCurrencyNews as a paid contributor. His work includes research, journalism and archived video on important market volatility related to stocks, digital currency and other volatile misunderstood asset classes. He offers a humorous, unique insight and the related back stories and drivers for readers interested in volatility and emerging market assets. Full disclosure Steve is long 25 digital currencies and sits on the board of multiple public companies involved in digital currencies, and owns shares in these companies from time to time.