In a move to provide small businesses with strategies to fight against natural calamities, Office Depot Inc. (ODP) has recently joined hands with the Business Civic Leadership Center (BCLC) of the U.S. Chamber of Commerce.
The Association of Small Business Development has recently revealed in its study that in a given year more than 1 out of 4 businesses experience a huge crisis due to natural calamities. Out of these businesses, which have no disaster plan, 43% never reopens. Only 29% of the businesses, who start their operations after the calamity, generally run it successfully after two years.
According to Office Depot, a little bit of advance planning and investment can be useful in protecting business from natural calamities. The company has suggested some simple and economical measures to the owners that can be helpful in minimizing or even preventing disruptive events. In case if any business owner wants to gain knowledge of keeping business safe from natural disasters, he can visit the BCLChelpdesk@uschamber.com website, which is entirely supported by the Office Depot Foundation.
Office Depot foundation is an independent non-profit making foundation of Office Depot, which provide assistance to enhance economic recovery after a calamity. The company has provided some quick tips in its website, which include keeping the disaster plan simple and cost-effective, preparation of contact lists of key people and employees, protection and back up of data, annual review of plan and keeping inventory of essential office supplies.
Office Depot is trying hard to maintain its profitability. The decline in business and consumer spending in the wake of the global meltdown and the deterioration of credit markets have resulted in sluggish demand for big-ticket items such as business machines and other durable products. Moreover, Office Depot faces stiff competition from office supply retailers, such as OfficeMax Inc. (OMX) and Staples Inc. (SPLS), and wholesale clubs, discount stores, mass merchandisers, computer and electronics superstores on attributes such as store format, pricing strategy and in-stock consistency. This may weigh upon the company’s results.
Consequently, we maintain a long-term ‘Underperform’ rating on the stock. However, Office Depot holds a Zacks #5 Rank, which translates into a short-term ‘Strong Sell’ rating.
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