Welcome back to the Deep Dive. Okay, I want you
to do something for me for a second. Just close
your eyes. I want you to imagine a very specific
smell. Okay. It's a mix of that dry, conditioned
air, a little bit of cardboard, and that faint,
almost sweet scent of thousands of reams of fresh
printer paper. Mm -hmm. I'm in there. You're
walking down an aisle. Yeah. Right? And it feels
like it stretches on for miles. You're surrounded
by these canyons of binders, ergonomic chairs,
every kind of pen you can imagine. Gel, ballpoint,
felt tip. Rollerball, the works. The works. And
then somewhere in the distance, you see it right
near the checkout. That big red button. The famous
easy button. Exactly. The easy button. Yeah.
Today we are talking about Staples. I can already
hear you right now. You're probably pausing,
looking at your phone, thinking Staples, the
office supply store. The place I go once a year
to buy. Printer ink and maybe a Snickers? Is
that really worth a whole deep dive? Right. Is
it? And I get the skepticism. I really do. It
sounds so mundane. But if you scratch the surface
of that red logo, you find one of the most turbulent,
fascinating, and just really illustrative stories
in modern American business. It really is. I
mean, we were talking about a company that started
because a guy broke his printer ribbon on a holiday
weekend. Yeah. It grew into this. absolute monster
that destroyed the local stationery shop, fought
a 30 -year war with the federal government over
monopoly laws, got swallowed whole by private
equity, and is now here in 2026 trying to figure
out if it's a shipping center, a co -working
space, or, I don't know, an optometrist's office.
It's a case study that touches on literally everything.
If you want to understand the rise of the category
killer retailer in the 80s and 90s, you study
Staples. If you want to understand the desperate
struggle of brick -and -mortar stores against
Amazon, you study staples. And if you want a
masterclass in modern financial engineering,
I mean, how private equity firms extract value
from these aging giant staples is maybe the perfect
example. And just to ground us, today is February
14th, 2026. So happy Valentine's Day to everyone
listening. I guess nothing really says I love
you like a bulk pack of manila envelopes. Or
maybe some 70 % off chocolates from the impulse
buy rack by the registers. Though, as we're going
to discuss, those shelves look a lot different
today than they did even 10 years ago. They certainly
do. I mean, right now in 2026, Staples is operating
around 860 stores in the U .S. Plus, they have
this massive footprint in Canada and a huge B2B,
a business -to -business delivery network. Right.
But the road to get here, to quote their own
marketing, it was anything but easy. Not all.
We have a huge stack of sources today, company
histories, FTC legal filings, which are fascinating.
Rather great. Financial reports from the Sycamore
Partners acquisition, advertising archives, and
some really, really eye -opening employee accounts
with the whole Amazon returns saga. Our mission
today is to unpack the rise, the fall, and the
very, very strange reinvention of this retail
giant. I have to admit, before we dive into the
heavy business stuff, I have a lot of nostalgia
for this place. Back to school shopping at Staples
was like a ritual for me. Oh, for a lot of people.
Walking in there with your list, picking out
the perfect planner. color coding your binders.
It felt like you were getting your life together.
It was aspirational, you know? It is. It's a
very common feeling. Stationery has this psychological
component to it, right? It represents order,
potential, a clean slate. But the business story
we're telling today is about what happens when
that emotional connection runs headfirst into
the cold reality of the digital age. What happens
to the store for work? When work goes digital,
what do you do then? So let's rewind the tape.
Let's go back to the origin story. The year is
1985. The hair is big. The music is synthesized.
And a man named Thomas G. Stemberg is having
a complete meltdown over Fourth of July weekend.
This is the founding myth. And it's a great one
because it's just so relatable. Stemberg was
a businessman. He was working on a big business
proposal over the Independence Day holiday. A
holiday, of course. Always. Always when things
break. So he's typing away. And you have to remember,
this is the era of impact printers, the dot matrix
printers. Sound. Yeah. For our Gen Z listeners,
a printer ribbon is kind of like, imagine a cassette
tape, but it's coated in ink. If that thing snaps,
your machine is just a paperweight. You're dead
in the water. You can't just download a driver
update. It's a physical problem. Yeah. So his
ribbon snaps. Oh, no. So Stemberg needs this
ribbon desperately. He gets in his car, starts
driving around suburban Massachusetts. But it's
a holiday weekend. The local stationary dealers,
you know, the little mom and pop shops that supplied
offices back then, they're all closed. They operated
on banker's hours. Yeah, exactly. Nine to five,
closed on weekends and holidays. They sold to
businesses, not to people working late. So he
finally finds a small shop that's open. And they
don't have the ribbon he needs. Or they have
one that's kind of similar, but the markup is
just insane. He's driving from shop to shop,
getting more and more frustrated, wasting his
entire holiday. And right there, in that moment
of frustration, the idea is born. He realizes
the whole system is broken. The entire distribution
model for office supplies is just... It's broken.
It's inefficient. You're at the mercy of these
small dealers with high prices and really low
inventory. And this is where his background is
so important. He wasn't an office supply guy.
Not at all. He was a grocery guy. He'd been an
executive in the supermarket industry. So he's
looking at this problem and he's thinking. Why
are we buying pens and paper? Like there are
these rare specialty items. Why can't we buy
office supplies the way we buy, you know, a box
of cereal or toilet paper? High volume, low margin,
huge selection, self -service. The supermarket
model. Precisely. He teams up with a guy named
Leo Kahn, who was actually a former rival of
his in the supermarket world. They were competitors,
but they respected each other. And they decide
to apply that grocery store logic to office products.
They want to build a warehouse store, a supermarket,
where you grab a cart and you walk down an aisle
of pens. But to build a warehouse, you need capital.
A lot of it. And this is where a very, very famous
name enters the chat. Bain Capital. Bain Capital.
Yes, the private equity firm. They were the early
backers. And specifically, you have to mention
Mitt Romney. Long before he was a presidential
candidate or a senator, Mitt Romney was on the
board of directors for Staples. For how long?
For 15 years. Wow. It's so wild to picture Mitt
Romney in like 1985 sitting in a boardroom debating
the wholesale price of paperclips. But he was
instrumental. You know, Bain Capital didn't just
write a check and walk away. They helped shape
the business model. They helped refine the strategy
of offering these deep, deep discounts to drive
huge volume. OK, so they get the funding. They
open the first store, Brighton, Massachusetts,
May 1st, 1986. And it was an. Instant sensation.
You have to put yourself in the shoes of a small
business owner in 1986. This was like the heavens
opening up. Suddenly, a ream of paper that used
to cost you $10 at the local stationer now costs
$4 at Staples. You could get everything, everything
in one trip. It was revolutionary. So they grew
fast. Fast is an understatement. They hit the
Fortune 500 in 1996. Ten years. Just think about
that. From opening the first door to being one
of the 500 largest companies in America took
just 10 years. That is absolute rocket fuel growth.
And they went international pretty quickly too.
Very. They expanded into Canada in 91. Originally
it was called the Business Depot, which is a
very literal name. I love that. Very Canadian.
And then they moved into the UK and Europe just
a year later in 1992. And this rapid growth,
this model, it brings us to a key... business
concept that staples really i mean they basically
personified it the category killer it sounds
so violent it is violent in an economic sense
a category killer is a retailer that specializes
so deeply and so overwhelmingly in one specific
sector toys electronics pet food office supplies
that they can offer a selection and a price point
that no general store and no small boutique can
possibly match so staples did to the local stationer
what What Toys R Us did to the independent toy
shop. Exactly. Or what Home Depot did to the
local hardware store. They basically nuked the
competition from orbit. If you were running Bob's
Stationery in 1990 and a Staples opened three
miles away. You were done. You were finished.
You just couldn't compete. Their buying power
allowed them to sell products for cheaper than
you could even buy them from your own wholesaler.
It was a complete consolidation of the market.
But here's the thing about conquering the world.
Once you've killed all the small competitors,
you're only left with the other giants. Right.
And that leads us to the next chapter, the merger
wars. Yeah. Because Staples wasn't satisfied
with just killing Bob Stationery. They wanted
to merge with their biggest rivals. This is a
saga that spans nearly 30 years, and it really
shows you how the government's view of monopoly
power has and has not evolved. It starts in 1996.
OK. At this point, Staples and Office Depot are
the two titans. They are the Coke and Pepsi of
office supplies. They announce a plan to merge
into one giant company. And the Federal Trade
Commission, the FTC, steps in and says, absolutely
not. Right. The argument in 1996 was. Pretty
traditional, pretty textbook. The FTC said, look,
if you two merge, you will control the market
for office superstores. Prices will go up for
consumers. You'll have a monopoly. Staples argued
that they competed with a Walmart in Circuit
City, places like that, right? They did, but
the government didn't buy it. The judge said,
no, Walmart sells pens, sure, but they don't
sell the specialized equipment and bulk supplies
that businesses need. The court blocked it. End
of story for a while. Okay, so that was 1996.
Now let's fast forward to 2015. The world has
completely, totally changed. Right in day. We
have the internet. We have Amazon. Staples tries
to buy Office Depot again. And by this point,
Office Depot had already swallowed up Office
Max. It was basically the final two gladiators
wanting to join forces. And this time, Staples'
CEO, a guy named Ron Sargent, he went in with
what he thought was a bulletproof argument. The
Amazon argument? The Amazon argument. He basically
said, Look at the world. We are not the monopoly
here. Amazon is the threat. The competitive environment
is rapidly evolving. Which is just corporate
speak for Amazon is eating our lunch. Please,
please let us team up so we don't die. That's
exactly what it was. They argued they needed
to merge to achieve these cost synergies, cutting
about a billion dollars in overlapping costs
just to have a fighting chance against the digital
giants. And look, to a layperson, that makes
total sense. I mean, in 2015, I was buying everything
on Amazon. My mom was buying everything on Amazon.
How could the government possibly look at Staples
and say, you are the dangerous monopoly? Feels
like they were looking at a map from 1990. That's
what Staples thought. That's what Wall Street
thought. But the FTC's counterargument was fascinating,
and it's a crucial detail that often gets overlooked
in this story. The FTC didn't focus on you buying
a laptop or a pack of pens. So what did they
focus on? They focused on the B2B contract market.
OK, let's unpack that. What does that mean specifically?
So they define the market not as individual consumers,
but as sales to large Fortune 500 corporations.
Think about it. If you're a company like General
Motors or Citibank, you don't just log on to
Amazon with a corporate credit card to buy supplies
for 50 ,000 employees. Oh, of course not. You
need a negotiated contract. You need locked in
pricing for the whole year. You need desktop
delivery to hundreds of branch offices across
four time zones. You need a complex billing terms
like net 30 or net 60. It's a whole different
ballgame. It's a logistics game, not just a retail
game. Exactly. And the FTC argued that in 2015,
Amazon business was still in its infancy. They
just couldn't handle that level of complex nationwide
corporate distribution yet. So the government's
view was? The government's view was. If you are
a Fortune 500 company, there are really only
two companies in America that can service your
nationwide contract, Staples and Office Depot.
If they merge, General Motors has no one else
to go to to negotiate a better deal. So because
they dominated that very specific, very lucrative
VIP club of big business contracts, the government
blocked the deal. Yes. A federal judge agreed
with the FTC. The ruling was that the merger
would substantially reduce competition for these
large business customers. The deal was officially
killed in May of 2016. And that failure was not
cheap. No, not at all. Staples had to pay Office
Depot a $250 million breakup fee. What? It was
a disaster for them. A huge public failure and
a massive financial hit. I see in the notes here
that they tried a zombie attempt more recently.
They did. They just can't let it go. In 2021
and into 2022, Staples now under different ownership,
which we'll get to, tried again. This time, they
just wanted to buy the consumer retail arm of
Office Depot. In. Rejected. Again. It just paints
this picture of a company that is so desperate
to consolidate because they really don't see
another path to organic growth. So they can't
grow by buying their rival. The government has
basically built a wall there. What happens next?
Well, if you can't be the predator, you become
the prey. And that brings us to the private equity
era. This is a massive turning point in the story.
In 2017, a private equity firm called Sycamore
Partners buys Staples for $6 .9 billion. A huge,
huge leveraged buyout. And Sycamore isn't a retailer.
They're a financial firm. Their goal is financial
return. And this is where the story gets into
some really complex and, frankly, controversial
financial engineering. It does. The very first
thing Sycamore did was effectively break the
company into three separate entities that just
happened to share a brand name. So you have Staples
U .S. Retail. That's the stores. Then you have
Staples Canada. And then the most important piece,
Staples North American Delivery. That's the B2B
business we were just talking about. Why split
them up like that? What's the strategic advantage?
Because the B2B delivery business is the cash
cow. That's the really valuable asset, that logistics
network we just talked about. The retail stores,
on the other hand. They're risky. Foot traffic
is declining. Leases are expensive. By separating
them, Sycamore insulates the valuable B2B business
from the potential failure of the retail stores.
It's a smart financial move to protect the core
asset. That makes sense. But then we get to this
thing called the dividend recap. I read about
this in the source materials, specifically what
happened in April 2019. And I had to read it
three times because it sounded, well, it sounded
like looting. It's a very controversial but very
common private equity practice. Let's break it
down properly because it's important. So Sycamore
owns Staples. In April 2019, they have Staples,
the company, take out a new loan, a massive refinancing
package totaling $5 .4 billion. OK, so Staples,
the company itself, borrows the money. The debt
is on Staples' balance sheet. Correct. The company,
its employees, its assets, they all now have
to service this new massive debt. But what happens
to the cash from that loan? That's the question.
Sycamore directed Staples to pay out what's called
a special dividend of $1 billion to Sycamore.
Wait, wait. So they forced the company they own
to take out a huge mortgage. And then the owners
took the cash from that mortgage and just put
it in their own pockets. That is essentially
what a dividend recapitalization is. A Bloomberg
report analyzed this and noted that with that
one move, Sycamore recovered roughly 80 % of
the initial cash they had put in to buy the company
in the first place. 80%. And how long did that
take? Less than two years. That seems unbelievably
fast. It is lightning fast. The typical industry
standard in private equity is usually five to
eight years to get your return. The traditional
model is you buy a company, you fix it up, you
improve operations, you make it better, and then
you sell it for a profit down the line. But they
didn't do that. Sycamore effectively cashed out
in 20 months. But doesn't that leave... It staples
the actual company that employs people and runs
the stores. Doesn't that leave them drowning
in debt? It loads the balance sheet with debt,
yes. It significantly increases the risk of bankruptcy
if there's a recession or a downturn. But for
the owners, the risk is now gone. They have their
money back. It fundamentally changes the incentives.
How so? You aren't necessarily building for the
next 20 years anymore. You've already won the
game. It feels like they're stripping the coppery
wiring out of the house while people are still
trying to live in it. That's the criticism. Critics
call it asset stripping. Proponents, on the other
hand, call it unlocking shareholder value. But
what it means for the listener, for a story,
is that from 2019 onward, Staples as a company
is operating under this heavy burden of debt
that it has to pay off every single month. So
the company is fractured into three pieces. It's
loaded with debt and it's facing an existential
crisis. They absolutely have to pivot. They have
no choice. And this brings us to the modern era,
the era of... work -life fulfillment. That was
the big rebrand in 2019. They ditched the old
logo, the one with the bent staple for the L,
and they introduced a new icon. It's supposed
to look like a staple, but also maybe a desk
or a bridge. It's very abstract. It looks like
a little table to me. But that slogan, work -life
fulfillment, I mean, come on, that sounds like
a buzzword salad from a terrible LinkedIn post.
It is extremely buzzword heavy. But the intent
from the CEO at the time, Sandy Douglas, was
clear. He realized they couldn't just sell products
anymore. Paper usage is in terminal decline.
Ink usage is in decline. They had to start selling
solutions and environments. So the store itself
has to become a destination. I've seen this change
in some of the locations near me. They launched
this Staples Connect concept. Right. They're
trying to turn the store from a warehouse into
a community hub. They introduced Staple Studio,
which is basically a co -working space. If you're
a freelancer, you can rent a desk or a small
office inside of Staples. Which, in theory, I
guess it makes sense. I'm there working. I run
out of pens. I need to print a big contract.
I'm already at the store. That's the logic. And
they got even more creative. They built these
spotlight theaters, which are like auditorium
style rental spaces for presentations or community
events. And they partnered with iHeartMedia.
To install professional podcast recording studios
in some of their Boston area stores as a trial.
Which is incredibly meta considering what we're
doing right now. Can you imagine if we were recording
this deep dive inside a Staples? Amidst the sound
of forklifts and the crinkling of plastic packaging.
But the idea is to bring in the creator economy.
If you come in to record your podcast, maybe
you buy a new microphone. Maybe you buy a new
office chair. Maybe you just buy a coffee and
a bag of chips. It's all about driving foot traffic.
And then, looking at the timeline, we have a
major and very weird development announced just
last year in August of 2025. I care. Eye care.
This is one of the most interesting pivots of
all. Staples announced a partnership with Now
Optics, they run the Stanton Optical and My Eye
Lab brands, to open full -service optometry and
eye care offices inside Staples stores. I have
to ask, why eyes? Of all the things to put next
to the printers and the paper shredders, why
an eye doctor? Okay, think about it strategically.
What is the one thing that Amazon absolutely
positively cannot do? They cannot examine your
retinas. They cannot check your prescription
for glaucoma. It requires a physical body in
a physical room with a trained professional and
specialized equipment. Amazon proof. It's completely
Amazon proof. It's a high margin service that
drives recurring visits. You need an eye exam
every year or two. And while your eyes are dilating
and you can't look at your... your phone for
20 minutes. Maybe you wander the aisles and finally
buy that new office chair you've been meaning
to get. It transforms the store from a place
you go to shop into a place you go for services.
That is the only way for big box retail to survive
in the long run. You have to offer things that
cannot be put in a cardboard box and shipped
to a doorstep. You know, we've talked a lot about
business strategy and finance, but we can't do
a deep dive on staples without talking about
their marketing. Because for a company that sells
arguably the most boring products on earth, paperclips
and toner, they've had some truly iconic and
memorable advertising. They really have. They
somehow managed to give a personality to office
supplies, which is not easy to do. We have to
start with the slogan we mentioned at the top.
That was easy. That launched in 2003. And before
that, their slogan was, yeah, we've got that.
Which is functional. It's fine. It's boring.
It's a statement of fact. That was easy was an
emotional promise. It acknowledged that office
work is frustrating, technology is annoying,
things break, and Staples is the antidote to
that frustration. And the easy button itself,
the story behind this is just... Great. It wasn't
even supposed to be a real product, was it? Not
at all. It was just a prop in a series of TV
commercials. The ads would show people facing
these complex problems. They'd press this big
red button and a poof, the problem would magically
solve itself. But then people started calling
the stores. Yes. Customers started calling and
walking in asking, where can I buy the button?
I need the easy button. I love that human instinct.
Just give me the magic button that fixes my life.
So Staples realized they had lightning in a bottle.
In 2005, they actually manufactured it. It sold
for about $5 to $7. All you do is press it, and
a voice says, that was easy. And that's it. It
doesn't connect to Wi -Fi. It doesn't order pizza.
It doesn't turn off the lights. It does absolutely
nothing of any practical value. And they sold
millions of them. Over seven and a half million
dollars worth. And the really cool part is that
the proceeds went to the Boys and Girls Clubs
of America. That's great. They even made international
versions. In Germany, the button said, Einfach
Easy. It became this desk toy icon. But they
had some weirder stuff, too. Do you remember
the Snowbot? Oh, that's a deep cut from the 90s.
The little robot snowman? Yes. I found this in
the advertising archives, a commercial about
a robot snowman who falls in love with a printer.
It was very quirky, very 90s humor. The snowbot
would cling to the printer box, and when the
customer tried to take it to the checkout, the
robot would just say, weeping, meeping, in this
monotone robot voice. It was bizarre, but it
was memorable. People remembered it. And then,
the absolute gold standard of back -to -school
ads, Alice Cooper. The school's out campaign.
This one flipped the script entirely. You know,
usually back to school ads show these happy kids
with their new backpacks. This ad was all about
the parents. It's the dad dancing down the aisle,
joyfully tossing supplies into the cart while
the song It's the Most Wonderful Time of the
Year plays. And the kids just look miserable.
It's hilarious because it's true. But the 2004
sequel with Alice Cooper himself was even better.
A grumpy teenage girl is shopping with her dad
and she says, I thought you said school's out
forever. And out of nowhere, Alice Cooper appears
from behind a stack of binders. And he corrects
her in full makeup. He says, the song goes, school's
out for summer. Nice try, though. It gave the
brand an edge. It showed they had a sense of
humor and weren't just some boring corporate
warehouse. However, not everything has been funny
or easy. We have to pivot now to the darker side
of this deep dive, the modern controversies and
the operational struggles, because in the last
few years, things have gotten really messy. Every
big retailer struggles, but Staples has faced
some really unique challenges as they try to
adapt. The biggest one recently has been the
Amazon returns saga. This started around 2023,
and it's still a huge part of their operation
here in 2026. The deal is Staples accepts unpackaged
Amazon returns for free. On paper, this looks
like a strategic home run. Amazon desperately
needs physical drop -off points. Staples desperately
needs foot traffic. The idea is simple. You walk
in with your unwanted Amazon item, Staples ships
it back for you, and while you're there, maybe
you buy a notebook or a new mouse. A win -win.
But the reality for the employees. It has been
described in internal forums and news reports
as a retail horror story. There was a petition,
right? Yes, a petition signed by over 5 ,000
employees. And they coined a term for these customers
that is just, it's so vivid. They call them Amazombies.
Amazombies. That's perfect. The image it creates
is perfect, right? You have these lines of people
just shuffling into the store, staring at their
phones, holding a loose toaster or a single shoe
without a box or a used blender with stuff still
in it. They march up to the shipping counter,
hold out their phone. with the QR code and expect
instant service. And the employees are stuck.
They aren't selling high margin tech or consulting
on office furniture. They are basically acting
as unpaid UPS workers. And the friction is really
high. The customer just says, here's my code,
take it. But the employee has to scan it, find
the right size bag, bag it, print a label, stick
it on, and then sort it into these huge overflowing
bins in the back. It's time consuming. It's messy.
It's low value work. And what's the critical
data point here, the conversion rate? Are the
Amazon bees actually buying anything? The internal
reports and employee accounts suggest. Not really.
The conversion rate is apparently very, very
low. Most of these people drop off their return
and walk straight out the door. So from the employee's
perspective, Staples is burning out its workforce
to bring in foot traffic that doesn't spend any
money. It really highlights that classic tension
between a corporate strategy looking at a spreadsheet
that says foot traffic is up 20 percent and the
on the ground reality of the floor staff dealing
with the chaos. Absolutely. And speaking of chaos,
we have to talk about cybersecurity. This is
a really bad look for a company that is trying
to pivot to selling tech services to businesses.
They want to be your IT department, but their
own IT has had some massive failures. There was
the big one back in 2014. That was malware they
found in the point of sale systems, the cash
registers. It affected 115 stores and compromised
over a million customer credit cards. That really
hurts consumer trust. But the attack in 2023
seemed even more damaging, at least operationally.
Oh, that was a complete disaster. It happened
during Cyber Week, literally the busiest online
shopping week of the entire year right after
Thanksgiving. A cyber attack disrupted their
internal systems, their delivery processing,
their online ordering, their customer service
tools. For days. Imagine being an office supply
company and your entire digital operation goes
dark during the Super Bowl of e -commerce. It's
a terrible, terrible look. If you are pitching
yourself to small and medium -sized businesses
saying, let us handle your tech infrastructure,
you cannot be the company that gets taken down
for days during Cyber Week. The hypocrisy is
just too glaring. And there's one more controversy
I want to touch on, even though it's from back
in 2012, because it really speaks to how these
big data -driven companies think. The price discrimination
study. This was a landmark investigation by the
Wall Street Journal. They found that Staples
.com was displaying different prices to different
people for the exact same product at the exact
same time. And it wasn't just based on shipping
costs or sales tax. It was a dynamic pricing
algorithm. Right. The algorithm would look at
your computer's IP address to figure out your
approximate physical location. Then it would
calculate your distance to a competitor's store,
like an OfficeMax or an Office Depot. within
say 20 miles of a competitor staples .com showed
you a lower price they knew you had other options
so they had to be competitive and if you were
in a store desert if you were in a rural area
where staples was the only game in town you saw
a higher price for the exact same item that feels
incredibly cynical it's the ultimate downside
of that category killer mindset if we've successfully
killed all the competition in your area we can
charge you a premium And the journal's analysis
noted that this often meant that lower income
rural areas were effectively subsizing the discounts
being given to wealthier suburban and urban areas
where there was more competition. It was legal,
but from a PR perspective. It was ugly. It felt
fundamentally unfair to a lot of people. So before
we wrap up, I want to look at their environmental
record. I mean, we are talking about a company
whose primary product for decades was paper.
Lots and lots of paper. They have made some genuine
measurable strides here. They are consistently
ranked as a top 25 EPA green power partner. They
have massive solar panel installations on their
fulfillment centers. The one in Hanover, Maryland,
is a great example. And they have a sleep mode
initiative for all their copiers and printers
in the copy centers that they estimate saves
nearly a million dollars a year in electricity.
That's significant. But I have to ask about the
ink recycling. Because I used to save my empty
cartridges like they're a gold bullion. You bring
them in and get store credit. That program has
changed, and not in a way that customers have
loved. It used to be a very generous rewards
program. But as of 2025, they've capped the rewards
pretty significantly. It's down to a maximum
of about $6 a month for most rewards members.
That's a big drop from what it used to be. Why
the cut? Well, it's the economics of a declining
category. Plain and simple. People are printing
less. The value of the recycled plastic and metals
fluctuates wildly on the commodities market.
And let's go back to our earlier point about
private equity. When you are owned by a firm
that is intensely focused on cash extraction
and maximizing profit, generous customer rewards
programs are often one of the first things to
get trimmed back. So let's try to bring this
all together. We have gone from Thomas Stemberg
driving around in a panic in 1985 to this massive
fractured debt laden entity in 2026 that's dealing
with Amazon bees and giving eye exams. What's
the big takeaway from this whole journey? I think
the takeaway is that Staples is the ultimate
survivor, but it has survived by constantly mutating.
It started as a retail revolution that changed
how we buy things. Then it tried to become a
government thwarted monopoly. And now it is essentially
a logistics network. That B2B delivery arm is
the real engine keeping the whole thing alive
with a retail face that acts as a sort of a waiting
room for the digital world. A waiting room. I
really like that metaphor. A place where you
go to drop off your Amazon package, maybe get
your eyes checked, maybe record a podcast, you
grab a pen while you wait. Exactly. They are
betting that physical presence still has value,
even if the reason for that physical presence
has completely changed. They are trying to become
the physical infrastructure that supports a digital
economy. But I have to end with a provocative
thought here. We know private equity firms operate
on a timeline. Sycamore already pulled out their
billion -dollar investment in that dividend recap
years ago. Do they actually care if the Staples
brand survives for another 20 years? And that
is the multi -billion dollar question, isn't
it? When you extract your initial investment
that quickly, the pressure to ensure the long
-term multigenerational health of the company...
can diminish is staples being rebuilt for the
next 50 years or is it just being managed to
squeeze out the last drops of value before the
lease runs out on the whole enterprise the eye
exams and co -working spaces suggest they're
trying to find a future but the debt load and
the cost cutting suggests they are walking a
very very high tightrope a tightrope walk over
a warehouse full of paper Well, next time you
drive past that red El Stato logo, take a second
look. It's not just an office supply store. It's
a battlefield of modern retail. And as we've
learned, absolutely nothing about its history
was truly easy. Thanks for listening to The Deep
Dive. We'll catch you on the next one. Goodbye,
everyone.