Second-largest office products company, with recognized brand name. Highly competitive and cyclical operating environment; Weak profitability; Sales correlation with white-collar employment levels; and High rent burden due to oversized stores. The ratings on Boca Raton, Fla.-based Office Depot Inc. reflect Standard&Poor's Ratings Services' opinion that liquidity should remain adequate over the next 18 to 24 months despite our view that profitability and credit measures may deteriorate modestly in 2011. Our assessment that the company's business risk profile is weak reflects its low and inconsistent profitability, significant competition, and demand correlation with white-collar employment, despite its recognized name as the second-largest U.S. office products retailer. In our opinion, the company has a highly leveraged financial risk profile as demonstrated
