Document Advisors | IDeAs blog, for better document strategies.

Document Advisors | IDeAs blog, for better document strategies.

Also on Twitter | @DocAdvisors

What does Staples acquisition of Dex Imaging signify for the industry? Part 2

1st part available here.

However, there is a difference this time. The pattern has always been for mega-dealers to be sold off when they reach a certain size, so that investors can cash out, but in the past the sale has always been to an OEM.

Now, for the first time since Inchcape’s abortive attempt in the early 90’s, we see an independent distribution company buying a major dealer group.

This takes me back to the debates we had in Inchcape, over whether to invest in Danka or NRG. One school of thought believed that the route to success was a close alliance with a manufacturer, and so favoured buying into NRG which had a close partnership with Ricoh, who were also the main supplier for Inchcape’s office equipment businesses in S.E. Asia and Australasia.

However, some of us favoured building an independent distribution operation, and would have preferred to buy into Danka, as a base for this. Ultimately, we lost the argument and we were overruled, but I have often wondered what might have happened if we had gone the other way.

Perhaps we were ahead of our time, as in the early 90’s the manufacturers were in a stronger position than they are now, and appeared almost invincible. However, now, the boot may be on the other foot, with print volumes falling and many manufacturers struggling in an increasingly commoditized industry, where technology is no longer such a differentiator.

Now the power may be shifting to the channel, which has a powerful asset in terms of its large customer base and strong client relationships, which give it the potential to sell a broader range of products and services, to offset the decline in office printing.

Staples of course approaches this from a base mainly in office products and supplies, which looks like an attempt to consolidate two declining businesses.

It is no secret that Staples, along with other Office Products distributors, has been eying the office printing business for some time. They had to, as the growth of MPS threatened their printer supplies sales, which accounted for around 40% of their total revenues.

What will be interesting is to see the direction Staples takes with its new acquisition.

One obvious move could be further print channel consolidation, continuing to acquire smaller dealers. However, they also now potentially have a base to extend well beyond office printing and supplies, into other faster growing and more exciting, mainly service-led businesses.

For example, Staples has already established a presence in IT Services. If they can broaden their business in that way, then they really will become a force to rival, and maybe even eclipse the printer manufacturers. To paraphrase the old Chinese saying, we live in interesting times.

Leave a Reply


This article was written on 23 Apr 2019, and is filled under Business Forecast, Point of View.


Current post is tagged

, ,