In January of this year, Staples Inc. finalized its merger with Essendant via Sycamore Partners, its private equity owners. Essendant is a wholesale distributor of workplace and office products. Its customers are resellers such as office supply superstores, mail order companies, drug and grocery store chains and e-commerce businesses.
We didn’t report on the merger at the time, as it appeared that it was designed simply to grow Staples’ existing business and would have little to do with Staples Promotional Products. But in a recent interview with Office Products International, Essendant president Harry Dochelli indicated that wasn’t quite the case.
Dochelli said that, provided the company complies with federal firewalls imposed as a condition of the merger, Essendant will soon begin offering promo items to its reseller network via Staples Promotional Products. Up until now, Essendant’s product portfolio did not include promotional products, focusing instead on janitorial supplies, office products, furniture, food service and various industrial supplies. Its limited physical marketing services offering includes only catalog production and custom flyers.
Adding Staples’ capabilities to the mix should allow it to significantly build out its marketing services arm with a robust promotional products service. That’s worth noting because Essendant already has considerable reach. It reported total revenue of more than $5.3 billion in 2016, and it serves roughly 30,000 resellers with a distribution network it says can ship most products overnight to about 90 percent of the U.S.
Staples Promotional Products is already the second largest promo distributor by sales volume. This move gives it more opportunities to grow by leaning on Essendant’s existing customer-base and distribution channels. That’s good news overall for Staples Inc., whose recent rough stretch includes reports that Sycamore Partners already wants out, multiple rounds of layoffs and the departure of its promotional products division head.
