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Staples CFO Sees No Rebound in 2H of 2008

Posted Jul 08, 2008 02:38pm EDT by Aaron Task in Investing, Newsmakers, Recession
Related: SPLS, ODP, DELL, HPQ
Staples shares were slipping Tuesday in sympathy with competitor Office Depot, whose shares tumbled after its mid-morning profit warning.

Ahead of Office Depot's red flag, I sat down with Staples vice chairman and CFO John Mahoney, who gave no indication that his firm is under similar duress.

Then again, Mahoney wasn't exactly ebullient, reiterating a view that the second half of 2008 is likely to bring little in the way of economic improvement. Consumers are "more cautious" and "less exuberant" today because of the economic woes, limited access to credit, higher gas/food prices and less job security, he concedes.

Still, Mahoney was upbeat about the back-to-school shopping season, which is "our Christmas" at Staples, the world's largest office supply retailer.

Off camera, Mahoney said he expects the company's acquisition of Corporate Express to close tomorrow as 95% of the target firm's shares have been tendered as Dutch regulations require.

Bringing better efficiencies to Corporate Express' U.S. operations will effectively pay for the $2.7 billion deal, Mahoney said. Meanwhile, he believes the acquisition gives Staples a solid growth opportunity in Europe, where its presence is relatively small.

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