Group & Industry News

Dear IS Members:


During the last few days we have received many emails and calls from our members asking questions like:

  • This is crazy, Staples is going to be my wholesaler now?
  • What happened to the shotgun marriage of Essendant & SP Richards?
  • No way that I am going to sell Staples private label products!
  • I need the RDC model - what happens to it?         
  • Do I just have to move from a stockless model to a stocking model?
  • What happens to all my customer data that Essendant has stored?

Well, we could go on but let’s deal with the facts as we know them at this time:

  • Essendant Board of Directors have decided that the offer from Sycamore Partners aka Staples is a superior offer to the offer from Genuine Parts Corp (GPC) aka SP Richards.
  • GPC will not counter offer the all cash Sycamore offered of $12.80 per share.
  • Sycamore will present a Purchase Agreement to Essendant soon.  If 51% of Essendant shareholders approve the offer, then the deal is done.
  • This could happen and close as early as mid-November.
  • This is all IF the FTC approves the transaction.

So IF that happens, then SPR is a national wholesaler and Staples is a hybrid model (retail, direct, & wholesaler), right? Well, not so fast. Sycamore has not clearly articulated their strategy and GPC has not publicly stated their position regarding SPR. We know, a lot of things are still uncertain.
We at IS have contingency plans for many scenarios. We have been exploring and will continue to explore a number of options that we believe are positive for the long-term viability of our members and the IDC. The RDC Agreement with Essendant provides us with options to run the RDC as it currently exists, to be bought out of the agreement should Essendant decide to terminate it, or to terminate the agreement ourselves for a fee should we find a more beneficial partner. We will review these options once we have all the facts.

We implemented the BUY DIRECT – SELL BRANDS campaign and many suppliers have enhanced their rebates and lowered minimums to encourage more direct buy. Control your margin destiny and increase your value to the group’s suppliers by increasing your direct buy.
It appears that answers for many of the unknowns are forthcoming in the next few months. So, as we have said in the past, “KEEP CALM and CARRY ON”; focus on your business, grow your sales and take advantage of the uncertainty with the market with your competitors’ customers (especially Staples and Depot).

No good decisions are made without all the facts. We have been preparing for many different scenarios by projecting what the facts MAY BE, and we look forward to implementing our plans to continue to move our group and industry forward once we know what the facts WILL BE.


Tonya Horn                                                                     Mike Gentile
Chairman of the Board                                                    IS President & CEO