This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Office Depot, OfficeMax, or 'Dunder Mifflin'

Stocks in this article: ODP OMX EBAY AMZN BBY WMT TGT

NEW YORK ( TheStreet) -- One of my favorite television shows, "The Office" on NBC, goes off the air tonight following a nine-year run. Nine years is a pretty long time to be on the air.

However, as a fan of the show, I want to say it's ending on a high note. But this wouldn't be accurate. The numbers don't currently support the statement. Besides, when bad boss Steve Carrel left in season seven, I knew it wasn't going to end well.

It seems fitting to use this as a point of analysis for some of today's retailers that deal in office supplies: Office Depot (ODP) and OfficeMax (OMX).

We've heard many times retailers are that not all the same. Issues that may be affecting one company are not necessarily the problems of another. It sounds logical. But that's not entirely true in all cases. In fact, in the office retail sector, aside from their names you can hardly tell these two apart. Even Staples (SPLS), which is seen as the best of the "Big Three," is posting negative earnings per share. It's not a coincidence.

The slowdown in the housing market, which has lead to poor consumer spending, has all but diminished the importance these stores once possessed, to put it nicely. Ask yourself, when was the last time you walked into one of these stores and felt you didn't have the store all to yourself? It's been at least 10 years for me, one year longer than "The Office."


While it can be argued that consumer spending and poor business climate have hurt these office retailers, to be perfectly honest it seems a stretch to suggest the economic slowdown is the only reason they've struggled. They are today's Blockbuster Video. The fact they still exist is a wonder. New retail/ecommerce concepts from eBay (EBAY) and, more notably, Amazon (AMZN) changed the game for them. Office Depot and OfficeMax have not played well since.

It wasn't just the traditional book stores that were endangered when Amazon caught steam. Circuit City and Media Play were killed off as soon as Amazon decided to expand and enter the realm of electronics. Today even Best Buy (BBBY), which has been a dominant name in retail, is hanging on for dear life. But as Best Buy tries to price-match Amazon, the company is suffering from eroding margins and poor comps.

video platformvideo managementvideo solutionsvideo player

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs