In a significant move for the office supply industry, ODP Corporation, the parent company of Office Depot, has announced its sale to Atlas Holdings in an all-cash deal worth $1 billion. This marks a dramatic shift for a business that was once a dominant player in retail, particularly in the 1990s when physical stores were essential for businesses needing office supplies. However, rapid changes in consumer behaviour and the rise of e-commerce have led to a slow but steady decline in ODP’s fortunes.
The sale comes after years of store closures and declining revenues, forcing the company to adapt and restructure its business model. As the office supply landscape changed, ODP’s decision to focus more on business-to-business (B2B) services was not enough to halt the broader decline. Now, with its future uncertain, the deal raises questions about what comes next for ODP’s remaining stores and loyal customers.
Decline and Consolidation in a Changing Market
In 2013, ODP merged with OfficeMax in a move that was expected to consolidate the two companies’ retail networks and boost profitability. However, the merger had significant long-term effects, particularly in terms of store closures. According to ODP’s SEC filings, the combined company initially operated 1,912 locations, but by 2024, that number had fallen to just 869. Over the course of the past decade, ODP shuttered more than 1,000 stores, representing a 55% decline in its physical footprint.
This reduction in stores was driven by the rise of online shopping and competition from larger retailers like Walmart. The retail environment became increasingly unfavourable for dedicated office supply chains, with e-commerce giants offering similar products with the convenience of home delivery. Despite the closures, ODP maintained a steady profit, with earnings of $3.30 per share in 2024, according to the company’s financial reports.
The Future of ODP Under Atlas Holdings
Now under the ownership of Atlas Holdings, a larger investment firm with a diverse portfolio, the company faces a new chapter. Atlas, which generates over $20 billion in annual revenue and owns 29 companies, has a history of managing and transitioning public companies into private enterprises. As of yet, Atlas has not disclosed whether further store closures will take place following the acquisition.
The key to ODP’s future may lie in its B2B ventures, particularly in industries like hospitality, where the company has been making inroads in recent years. “Atlas brings an understanding of our industry, along with the operational expertise, resources and track record of supporting its companies,” said ODP CEO Gerry P. Smith, expressing optimism about the transition. However, with fewer retail stores and evolving customer demands, the company’s next steps will be crucial in determining whether it can continue to maintain relevance in an increasingly digital world.
