Office Depot v Staples: the gloves are off

Just one month after a judge put the kibosh on a merger between America’s two biggest office supply retailers, the companies are going head-to-head to win customers.

In preparation for one of its busiest sales periods of the year, Office Depot says it will hire 33% more US workers this summer, to beef up its customer service for teachers, students and parents during the back-to-school season. That translates to an additional 2 000 workers compared with last summer, for a total of 8 000 new hires.

The news comes a day after Staples, the larger of the two competitors, said it will offer same-day delivery in several major markets for a fee of $14.99.

“This is our big season, the back-to-school season, so this is when we do the most of our seasonal hiring,” Lynn Gross, Office Depot’s vice president of human resources for retail, told CNBC. “[This year’s boost is] not necessarily related to the merger, but it definitely, I think, is a sign that we are moving forward as a stand-alone company and focused on providing superior customer service.”

Gross said most of the summer hires will assist with in-store needs such as stocking shelves, helping customers and working the checkout register. The retailer is also putting a big emphasis on its buy online, pick up in store service, so the hires will also help with those needs. However, Gross said the seasonal employees’ duties will fall roughly in line with previous summers.

Because the retailer closed 181 US stores in 2015, the incremental hires will translate into about five more employees per store, she added.

Seasonal associates typically work 22 to 28 hours a week, and their time does not cut into existing employees’ hours, Gross said. In general, seasonal employees work from July through September, depending on a market’s school calendar. Though Office Depot could not provide specific numbers, some of these employees are brought on permanently.

Gross declined to comment on pay, except to say that the company’s compensation practices vary by market, and that it does its best to stay competitive.

Staples did not respond to CNBC’s request for information on its back-to-school plans.

Since a May court ruling declared Office Depot and Staples’ merger a bust, analysts have questioned whether both could continue to exist as stand-alone companies. Staples management was quick to lay out its plan for growth, which includes closing more of its North America stores and ramping up its offerings for businesses. Its recovery plan hit a bump last week, when CEO Ron Sargent resigned.

As for Office Depot, management has offered few details regarding its strategies. The company said it has hired consulting firm Bain & Co. to assist with identifying strategic alternatives, and last month, it announced a $100-million stock repurchase programme.

In their attempt to merge, the two retailers argued Amazon was transforming the market for office supplies. But that argument was rejected.

By Krystina Gustafson for www.cnbc.com

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