This Might Be the Last Black Friday for 3 American Companies
By CASEY WILSON, Associate Editor, Money Morning • November 21, 2016
American companies. The day after Thanksgiving (and for some shoppers, the night of) kicks off the critical holiday season for American companies…
Last year, over 74.2 million Americans shopped for the best deals of the season on Black Friday, amassing over $10.4 billion in profits for retailers, according to research firm ShopperTrak.
Of that $10.4 billion, $4.45 billion was spent on online transactions alone – a growing problem for most traditional retailers.
As businesses gear up for the crowds on Nov. 26, some are preparing for the last time.
We've compiled a list of three American companies expected to disappear from the U.S. market in 2017…
3 American Companies on Deathwatch
No. 3: Office Depot Inc. (Nasdaq: ODP)
Office Depot announced in August that it will be closing more than 300 stores in order to cut costs by $250 million over the next two years. These closings are in addition to the 400 stores ODP has closed since 2014.
Adjusted sales fell 4% in Q3 compared to the prior-year period and are expected to drop even lower in Q4.
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The company was set to merge with its last remaining rival, Staples Inc. (Nasdaq: SPLS), this year, but was denied by a federal judge on May 10 because of antitrust concerns.
After the government squashed the merger, the outlook for the office-supply giant grew dim.
"[Office Depot's rival] Staples has the best chance of surviving," predicted Money Morning Technical Trading Specialist D.R. Barton on "Varney & Co." on Nov. 17. "But without the Office Depot Store consolidation, the company has a long row to hoe."
Office-supply companies have been struggling to keep up with market-dominating online retailers like Amazon.com Inc. (Nasdaq: AMZN). Amazon Business currently accounts for 9.9% of B2B sales, as estimated by research firm eMarketer. According to Forrester Research, Amazon Business will account for 12% of B2B sales in the United States by 2020. Some of the most widely consumed products on the platform include computers, IT equipment, and office supplies – directly in competition with Office Depot.
For now, Office Depot is focusing on trying to save its North American business over the next year since it sold its European business to the Aurelius Group in September.
ODP stock currently trades at $4.62 per share. It has lost 18% so far in 2016.