In the Matter of Staples/Essendant, Inc., File No. 1810180
I am strongly AGAINST allowing Staples to become the latest casualty of an equity fund merger. Please do not allow its owners to merge Staples w/ another company. I like Staples. I get all of my business and personal supplies there I find their prices, deals, and teacher benefits much better than those at Office Depot, the only other major competitor locally. 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. If this merger goes through, investors in a private equity fund will have more power to reduce competition, close stores, and lay off workers. The FTC needs to step in and block this Staples/Essendant merger, as it presents an unacceptable threat to competition. Private equity related mergers deserve heightened scrutiny as private equity funds often remove companies from the markets in which they were situated at time of acquisition, or drastically reduce the scale of their operations, leading to anti-competitive outcomes by reducing the number and scope of firms in a given market. After the great recession, private equity funds have turned to acquisitions to increase profits but this routinely comes at the expense of a company's ability to compete, retain market share, or retain employees. Companies get loaded up with debt and are unable to survive. The FTC needs to stop the Staples/Essendant merger and generally scrutinize the anti-competitive practices of private equity when assessing private equity-driven mergers. 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. 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 opposes this and other bad deals. He 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." Staples has already been closing stores and cutting jobs. If this merger goes through, matters will get much worse.