Second-largest national office product player; and Diverse channels of distribution Recent same-store sales performance has been negative; Some regional concentration within North American retail; Operating margins well below Staples, the industry leader; and Recent operating cash flow generation trend has been weak. The ratings on Delray Beach, Fla.-Office Depot Inc. reflect the highly competitive operating environment, some regional concentration in the its North America store base, and weaker operating margins that are well below those of Staples Inc., the industry leader. Furthermore, Office Depot's store base is around 30% smaller than Staples' North American store base, its operating margins are more than 500 basis points lower than Staples', and its stores also face greater direct competition in more markets. The
