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News Story
Updated: 09/30/2013 11:29:51AM

Office Depot or Staples?

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D ear Mr. Berko: If you had to make a choice between 600 shares of Office Depot or 200 shares of Staples, which stock would you choose? This investment would be for this year’s simple IRA. — P.W., Elkhart, Ind.

Dear P.W.: Office Depot (ODP — $6.62) is a schlocky outfit run by overpaid, schlocky people, with a schlocky billing department that many municipalities claim overcharge and over-bill for products and services. The General Services Administration and municipalities in the states of Nebraska, California, Florida, Missouri, Ohio, Texas and Colorado, to name a few, are demanding refunds for products never received, bait-and-switch tactics and costs in excess of what they were quoted. And at the head of this alleged fraud is a lad who is called Steve Odland, an uncommunicative sort who is not held in high regard by many of the rank-and-file employees at ODP’s costly new offices in Boca Raton, Fla.

ODP is a very poorly managed $12.5 billion revenue company that hasn’t made a dime, dinar or deutsche mark in two years and expects to lose money this year, too. ODP sells the same stuff at virtually the same price as Staples (SPLS — $21.43), which in last year’s terrible business environment increased revenues and made a good profit. ODP’s same-store sales declined 16 percent last year, with little improvement in sight for 2010.

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