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Office Depot, OfficeMax, or 'Dunder Mifflin'

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 - Get Report) 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.

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