Photograph by George Sakkestad
The Staples/Office Depot merger may close this Los Gatos Avenue store or the Staples on N. Santa Cruz.
By Clarence Cromwell
With Staples and Office Depot merging, it looks like Los Gatos will have one less office-supply store.
Town Manager Dave Knapp is already phoning around the Bay Area, recruiting a new business to step up in case the new company, Staples/Office Depot, closes either the Staples on N. Santa Cruz Avenue or the Office Depot on Los Gatos Boulevard.
Knapp said he's pitched Los Gatos to the upscale supermarket chain Draeger's and to The Good Guys electronics chain.
Draeger's owns stores in Los Altos and Menlo Park and plans to open a third in San Mateo next June. The grocer was eyeing Los Gatos before the Staples-Office Depot merger, and Knapp called afterward to alert co-owner Richard Draeger of the possible vacancy of one of the buildings. Knapp said he guessed Draeger's might be interested in the Staples building, which used to be a grocery store.
Knapp added that the town believes there's plenty of room for two food stores in the downtown area; officials met with Safeway in recent months to encourage the store to add more parking and to expand, although Safeway hasn't moved on the idea.
Draeger's gourmet and high-end products would complement, rather than compete with, Safeway's offerings, Knapp said.
But the town manager said The Good Guys would be an even better replacement for the Office Depot because they sell goods that Los Gatos doesn't yet offer. The town tries to supply all the services residents want or need, Knapp explained. Keeping the services close to customers reduces traffic, saves residents a trip to another city and makes tax dollars for the town.
Bringing The Good Guys here would constitute a win for town officials. The Good Guys would generate plenty of sales tax revenue for the town by selling big-ticket items like stereos and TVs, Knapp said, and they wouldn't draw too much traffic.
Bringing in either business would probably reap the town treasury more tax revenue in the long run, Knapp said, because Los Gatos has too many office-supply stores now. Office Depot and Staples have been engaged in a three-way competition with McWhorter's Stationers for local customers. Fewer office-supply stores would mean healthier business for the survivors and would put a building to use for something the town needs more than a third office-supply outlet.
Staples and Office Depot spokespeople said there have been no decisions about whether to close stores or lay off employees.
But employees of the new company said about 50 stores are to be closed, in areas where Staples and Office Depot outlets are relatively close together. Final decisions about closing stores and laying off employees aren't expected until January.
Observers believe the Staples on N. Santa Cruz is most likely to close--if either of the stores closes--because Office Depot fought for a very long time to get town approval for building its Los Gatos Boulevard building. Office Depot fought members of the Los Gatos Boulevard Community Alliance and the Planning Commission about the design of the building, and in the end put up a structure that looked considerably more unique than the traditional warehouse style for which it is known. McWhorter's also fought to keep Office Depot out of town.
The merger, announced Sept. 4 and not yet approved by stockholders, will involve a pooling of the two companies' assets. According to store officials, the merger was designed to reach the two companies' customers more efficiently and give the corporation more buying power, thus saving customers money.
Staples/Office Depot will own 1,100 stores when the merger is final. All the stores will be renamed "Staples The Office Depot."
The company will be headquartered in Massachusetts.
This article appeared in the Los Gatos Weekly-Times, October 9, 1996.
©1996 Metro Publishing, Inc. All rights reserved