In the Matter of Staples/Essendant, Inc., File No. 1810180 #03245

Submission Number:
03245
Commenter:
Michael LaGassey
State:
Florida
Initiative Name:
In the Matter of Staples/Essendant, Inc., File No. 1810180
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. 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. Thank you for your attention to this matter.