Office Depot’s parent company, the ODP Corp., is close to a decision on what to do about its retail business, which is currently expected to be sold. While rival Staples in January of 2021 said it wants to buy all or part of Office Depot, particularly the retail business, the actual decision of what ODP will do with the retail business will be made soon, ODP executives told financial analysts on May 4 during the company’s first fiscal quarter 2022 conference call.
David Bleisch, executive vice president and chief legal and administrative officer of Boca Raton, Fla.-based ODP, opened the conference call with an update on the company’s plan to split into two businesses, one focused on business-to-business and one focused on retail.
“On January 14, 2022, the company announced that its board of directors was delaying the previously announced plan to separate the company into two independent publicly traded companies so that it could carefully review the proposals with the assistance of its financial and legal advisers to determine the course of action that it believes is in the best interest of the company and its shareholders,” Bleisch said. “The company anticipates that its board of directors will complete its review of the alternatives in the near term.”
ODP CEO Gerry Smith, during his prepared remarks, said ODP delivered strong results despite numerous market-wide challenges while making significant progress on strategic initiatives to unlock shareholder value.
ODP in January said that its board of directors decided to delay the split of the company into two separate public companies after the company received interest in its consumer business. The move came just days after ODP said it would sell its CompuCom systems integration business to an affiliate of Variant Equity Advisors.
During his prepared remarks, Smith said ODP made significant progress during the quarter on its strategic initiatives focused on unlocking shareholder value. Preparing ODP for exiting the consumer business is a big focus for the company, Smith said. “Operationally, we’ll keep our heads down and focused on continuing to drive strong execution while making progress on the strategic evaluation of our consumer business, working to bring that process to a close in the near term,” he said.
In the meantime, ODP is continuing to invest in building up its business-to-business organization, Smith said. This includes investing ODP’s B2B digital platform and its supply chain and sourcing assets, he said.
ODP has made much progress in advancing its digital platform business, Varis, and in setting the foundation for Veyer, its logistics and supply chain business.
“At Varis, in Q1, we initiated a private preview launch on the Microsoft platform and continue to expand our key supplier network,” he said. “Most recently, we were the keynote speaker at a major Microsoft Business Central Integrators Conference where Varis was prominently featured as the key procurement technology on Microsoft Dynamics 365 platform.”
With Veyer, ODP is enhancing its supply chain capabilities and aligning its assets to support its B2C and B2B businesses for now, and will do so for other third-party customers in the future, Smith said.
“This year will mark an important milestone for Veyer, as the business is formally established, and we continue to expand our data-driven platform to support our current and future routes to market,” he said.