OfficeMax Unveils Small-Format Stores - Analyst Blog

OfficeMax Incorporated ( OMX ) announced the creation of a new small-format store named OfficeMax Business Solutions Center in downtown Milwaukee. This one of a kind, new-age store will offer tailored business services, solutions and products, catering to the needs of small businesses.

This leading supplier of office products and services, is reinventing itself by focusing on smaller-format stores and enhancing shoppers' experience through store renovations. This in turn, will facilitate the company in improving store sales productivity.

Through its cutting-edge store format, OfficeMax intends to become more accessible and interactive, with emphasis on customers' preferences. OfficeMax's Business Solutions Center features an integrated service counter to address the complex business needs in the areas of marketing and promotion, IT and web solutions.

As business budget remains tight, consumers and small businesses remain frugal about big-ticket spending on items such as business machines and other durable products. Thus, the companies are coming up with new and innovative strategies to navigate through the challenging economic environment.

Apart from remodeling stores, OfficeMax expects to downsize and relocate stores in the U.S. The company plans to close 5-10 stores and open 6 stores in Mexico in 2013.

Moreover, OfficeMax and Office Depot Inc . ( ODP ) decided to merge their businesses in order to better compete with the industry bellwether Staples Inc . ( SPLS ) and online rivals such as Inc. ( AMZN ). The decision augurs well for both the companies, which have been grappling with soft sales.

The all-stock merger agreement, which involves 2.69 Office Depot shares for each share of OfficeMax, would result in cost synergies of $400 to $600 million yearly by the third year from the time of closing of the transaction. The transaction is expected to be concluded by the end of 2013. Management of both the companies are yet to decide on the name of the newly formed company, the location of corporate headquarters and the CEO.

Currently, shares of OfficeMax retain a Zacks Rank #3 (Hold).

AMAZON.COM INC (AMZN): Free Stock Analysis Report

OFFICE DEPOT (ODP): Free Stock Analysis Report

OFFICEMAX INC (OMX): Free Stock Analysis Report

STAPLES INC (SPLS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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