Worcester Business Journal

wbjournal.com | October 16, 2017 | Worcester Business Journal 17 Thank You! Look online to save the date for next year's Festival WorcesterWineFestival.com The Worcester Wine Festival would like to say Thank You to the City of Worcester, our Partners, Suppliers, Vendors and Attendees for making our inaugural event a major success! Business Appraisals in Worcester? YOU BET! Since 1981 Worcester, MA | (508) 753-1400 www.georgeandco.com Buy-Sell | Divorce | Estates | Economic Damages | General Interest M E T R O W E S T F O C U S given little to no details publicly about its ways of operating such businesses, and declined to comment for this story. "There's little doubt the odds are stacked against Kaluzny," media outlet Bloomberg said in a profile on the Sycamore leader in May. Leveraged buyouts have been a part of the corporate world since the 1970s, became more popular in the '80s, and then fell out of favor, said Leon Rosenthal, a finance professor at Bentley University in Waltham. The idea of private equity is a new owner will run the company very efficiently, getting rid of unprofitable stores or product lines or staff, and returning the company to the public market again at a large profit, he said. In Staples' case, Rosenthal said, life under private equity may likely mean sharper cuts than have already been put in place. He didn't predict whether Staples will do better as a private com- pany than it did a public one. "They're going to have to close a lot more stores," Rosenthal said. "They have too many stores. There's no ques- tion about that." Staples' unknown future If Staples' tenure under private equity is successful, it'll break a bad streak for the retailer. In May 2016, Staples and rival Office Depot called off a proposed $6.3-billion merger amid regulatory pushback. That decision cost Staples $250 million in a fee it paid to Office Depot. The New York Times in June speculat- ed Sycamore may try to revive a merger with Office Depot under a Trump Administration more likely to approve such a deal. Last December, Staples sold its European division to Cerberus Capital for a $117-million loss. Then, early this year, Staples said it would close 70 stores this year – on top of more than 300 it had already shuttered since 2011, cutting more than one-fifth of its total. Cost-cutting has been a priority even before Sycamore entered the picture. Staples said in a presentation to share- holders early this year it planned $100 million in cuts each year from 2016 to 2018. The company cut roughly $300 million in 2015 alone. Business-to-business sales are expect- ed to to be a larger share of Staples' business, at least if prior plans continue under Sycamore. Staples said earlier this year product deliveries were planned to increase from roughly 60 percent of total sales in 2015 to more than 80 per- cent by 2020. W

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