In the Matter of Staples/Essendant, Inc., File No. 1810180 #00227

Submission Number:
00227
Commenter:
Charles Lowe
State:
Outside the United States
Initiative Name:
In the Matter of Staples/Essendant, Inc., File No. 1810180
As an Australian I am writing to urge you to block the proposed merger between Staples and anopther office supplier. Last year it was Toys R Us and Sears. This year, it could be Staples that billionaires destroy using their latest tool: the private equity fund. Private equity funds allow the wealthy to pool their money to buy out profitable companies, like Staples. The private equity fund then loads up the company with debt while slashing wages, benefits, and jobs, all to make more money for the wealthy investors. Eventually the fund either sells the gutted company -- or, in the case of Toys R Us, closes it entirely, even though the company still makes money, even though thousands of workers lose their jobs. Sycamore Partners, the firm that owns Staples, has already shut down most Nine West stores and picked apart companies like Hot Topic and Aeropostale to try to extract as much value as possible.1 If Sycamore's attempt to merge Staples with another office supplier goes through, investors in a private equity fund will have more power to reduce competition, close stores, and lay off workers. Private equity funds have had a devastating effect on retail across America. When one such fund closed Toys R Us last year, 31,000 people immediately lost their jobs. It took a mass public mobilization to get them severance. But that doesn't stop the long-term damage to communities of a major store closure.2 In many cases private equity funds also try to eliminate the competition. In this case, a private equity fund that owns Staples wants to merge it with another office supply company. The result will be to kill off competition -- and eventually, kill off another successful retailer. FTC Commissioner Rohit Chopra, who stands with us in opposing this and other bad deals, used this analogy to explain the problem: "Remember the paper supply company Dunder Mifflin from "The Office"? The merger puts even more suppliers like them at the mercy of Staples -- something our investigation overlooked."3 Staples has already been closing stores and cutting jobs. If this merger goes through, matters will get much worse. Chopra's own statement explained why this and other private equity-led mergers are so damaging.4 He has called on the public to weigh in and tell the FTC to stop this merger. He's right. Trusting that you will act in the dimensional public interest, Yours faithfully,