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OfficeMax, Office Depot reportedly discussing merger

BY Marianne Wilson

New York — Office Depot and OfficeMax are in talks to merge, according to reports by the Wall Street Journal and Bloomberg.

The retailers are discussing as potential stock swap that would result in a single company with nearly $18 billion in revenue, reports said. The combined company would be better positioned to take on Staples, Walmart and other competitors.

"The merger makes sense with both companies suffering from falling revenue since the 2008 recession and struggling to generate a profit margin of 3.0% (while Staples generates a margin greater than 8.0 percent)," explained IBISWorld office supply industry analyst, Dale Schmidt. "The hope is that the resultant company could cut redundant costs, raising its profit margin, while retaining a market share that will compete with Staples. However, with the ever-increasing popularity of online sales and big-box retailers, the brick-and-mortar chains of both Staples and the merged company will struggle to grow significantly."

Any deal that is struck, however, may be challenged by the Federal Trade Commission, Bloomberg said. In 1997, a lawsuit by the FTC prevented Staples from acquiring Office Depot.

"We think there is a fair amount of risk that the FTC would not look favorably on a potential merger of the number two and number three players in the office product space," said Citi Investment Research analyst Kate McShane in an Associated Press report.

Rumors of a merger between the two office supply chains, both of which have been struggling, have been circulating since last year.

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Build-A-Bear Workshop widens Q4 loss; reports annual loss of $49 million

BY Marianne Wilson

St. Louis — Build-A-Bear Workshop, which is in the midst of a major turnaround initiative, reported a net loss of $36.5 million for its fourth quarter ended Dec. 29, compared with a net loss of $9 million during the prior-year quarter.

Total revenue for the quarter was $118.2 million, down 1% from the prior-year quarter.

For the full year, Build-A-Bear Workshop reported a net loss of $49.3 million in fiscal 2012, compared with a net loss of $17.1 million in fiscal 2011. The 2012 loss included a $33.7 million goodwill impairment in the fourth quarter.

The company reported total revenue of $380.9 million in 2012, down 3% from the previous year.

Founder and CEO Maxine Clark, who announced her retirement Jan. 31, said that the company was “disappointed” with its overall results. But she noted that in the fourth quarter the company increased same-store store sales in North America to show a marked improvement from the third quarter.”

“This increase was driven by the initial benefit of our brand building marketing campaigns, particularly in the U.S., and a return to traditional holiday product offerings,” Clark stated. “The U.K. remained challenging, which drove down our consolidated comparable store sales.

Clark also said: “We are in the midst of a multi-year turnaround initiative that includes closing an additional 50 to 60 stores by the end of 2014, updating our experience with a new design that builds our destination appeal and refocusing on brand messaging in our marketing programs.”

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Checkpoint Systems introduces safer anti-theft label

BY CSA STAFF

THOROFARE, N.J. — Checkpoint Systems, a global supplier of shrink management solutions, has introduced a new enhanced performance (EP) anti-theft EAS (Electronic Article Surveillance) food label for supermarkets that is certified to be microwave safe.

The 4010 EP Food Label was designed specifically to protect fresh and frozen supermarket food. It has been certified as microwave safe and non-flammable by TUV Rheinland, an international service group that provides manufacturers with assessment and certification services to ensure product safety.

Extensive TUV testing revealed EAS labels from other manufacturers sometimes showed browning around the edges and in some cases even caught fire when placed in a microwave oven, making the food potentially unsafe for consumers. Checkpoint’s 4010 EP Food Label passed all TUV tests without incident.

“The new 4010 EP Label is designed specifically for food and offers optimized protection without risk,” said Farrokh Abadi, President & COO, Shrink Management Solutions Checkpoint. “By offering maximum protection and enhanced deactivation at the point of sale, food retailers can improve merchandise availability and enhance their consumers’ shopping experience while increasing sales.”

The 4010 EP Food Label can be applied through high-speed source tagging at the point of manufacture, or through in-store tagging. The new EAS label maintains its enhanced performance throughout the supply chain, including after being stored in a freezer.

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