Office Depot Inc (NASDAQ:ODP) as announced its intention to acquire CompuCom Systems as part of its plan to be more like retailer Amazon.com, Inc. (NASDAQ:AMZN).
Office Depot is planning to shift its operating strategy in order to achieve more success in its business and it looks as if the company has been studying retail giant Amazon to achieve this. The online retail behemoth has a highly successful business model that has been the result of significant investment in IT and fulfillment services. This has allowed the firm to run its retail operations more effectively and Office Depot wants to adopt a similar strategy through its recently announced $1 billion acquisition of CompuCom Systems.
Office Depot stated that the acquisition of CompuCom is its first step towards transforming from a traditional retailer into a technology and business services company. CompuCom deals with the procurement and installation of office hardware and software. It also deals with specialized services such as data centers, remote desks and on-site IT professional services. The IT services firm was founded in 1987 and it currently has more than 1.5 million unique end users.
“Technology is the office supply of the future. The combination of CompuCom’s enterprise IT services with our millions of customers and approximately 1,400 distribution points gives us the credibility and scale to build a sustainable platform and stand apart from the competition,” stated Office Depot CEO Gerry Smith.
Office Depot plans to set up CompuCom tech kiosks inside its locations and it hopes that this will also facilitate more traffic in the stores. The retailer stated that it expects increased foot traffic and service revenue to boost profitability.
The acquisition of CompuCom represents Office Depot’s plan for the future as part of its strategy to evolve to facilitate continued growth in its business. It is also important for the company to adapt in accordance with the rapid changes that have been taking place in the technology industry. It is also an effort towards diversifying to keep up with the highly competitive market.
Office Depot stock closed the latest trading session on Tuesday at $3.76 after tanking by 0.53 percent compared to the value of the stock during the previous close.