In keeping with the changing trends, Staples, Inc. (SPLS - Free Report) has been focusing on expanding its offerings, effective merchandising and enhanced online features. As part of its goal, this leading retailer of office products and services entered into an agreement to acquire Canada's PNI Digital Media for C$73.9 million (or approximately $67.3 million).
PNI Digital Media’s software platform has been assisting retailers through online, in-store kiosk software and mobile apps in selling personalized products such as photo prints, photo books, calendars, business cards, documents, wedding invitations, stationery and other items.
PNI Digital Media, which is expected to carry on its operations independently, will be able to enhance its customer base and provide better services by using the Staples platform. The deal still awaits the approval of PNI shareholders and the go-ahead from the Supreme Court of British Columbia. A special meeting of PNI shareholders is slated to be held on Jul 8, 2014.
Staples is likely to benefit from the economic rebound as its performance is highly correlated with economic health. In an attempt to drive its performance, the company has shifted focus toward improving store productivity, accelerating growth in adjacent categories, increasing market share in core office supplies and streamlining its cost structure. Online retailers such as Amazon.com Inc. (AMZN - Free Report) have been impacting its sales.
Staples has been closing underperforming locations and downsizing stores to rationalize its business. Additionally, the company is focusing on the delivery business, which requires less capital and generates higher margins. These positives could prove to be a game changer for the company in the long run.
Staples, which competes with Office Depot, Inc. (ODP - Free Report) and United Stationers Inc. , currently holds a Zacks Rank #5 (Strong Sell) highlighting its negative earnings surprises over the trailing four quarters. The company has missed the Zacks Consensus Estimate in 3 out of the last 4 quarters, reflecting an average miss of 8.2%.