The final page in the Office Source saga has been turned, and the book can now be closed for good. Loyal readers of this blog will remember that the Office Source story blazed through these pages over the 2nd half of 2009, first in July of 09; ( Office Source Sells Itself) and finally in November of 09; (Office Source Files for Bankruptcy).
To catch everyone up, Office Source spent the middle part of the 2000's "rolling up" small and medium sized regional office furniture wholesale distributors. Their goal was to become the third national office products and furniture wholesale distributor (behind Fortune 500 listed United Stationers and very large SP Richards). Now, I am not an expert in business strategy, but to paraphrase the former Chairman of General Electric, Jack Welch (who is an expert), be number one or number two in your industry / region / niche, or get out of the business.
Unfortunately no one who was involved with Office Source took Mr. Welch's advice, because there were a lot of "smart" people who sold/traded/gave their well run businesses to Office Source, for a combination of cash and (ultimately worthless) stock. History has shown that these "roll-ups" rarely end well (anybody remember United States Office Products - USOP), and Office Source was no exception. As documented above, management made a "hail Mary" pass to an Alaskan Native financial group (if you have to leave the lower 48 for financing, that might be a red flag...) -- but alas, it was not enough to save the company.
Insiders have told me that there was some last minute negotiating with United Stationers going on -- but United didn't get onto the Fortune 500 by being soft, and I'm sure they saw the obvious, which was they could simply let the company go into bankruptcy and pick up the assets they wanted without any of the liabilities.
Fast forward from the Office Source bankrupcty of November 09, to yesterday (March 4, 2010), and viola - United Stationers unveils their brand new stand alone United Stationers Furniture Division, complete with a number of the former Office Source "assets", running key parts of the division. I recognize some of the key names that made the transition, and I'm glad (and not surprised) that United saw through the smoke and mirrors, and picked up the right assets.
Moral of the story -- business basics never go out of style... (no matter how cool the website looks)...
To catch everyone up, Office Source spent the middle part of the 2000's "rolling up" small and medium sized regional office furniture wholesale distributors. Their goal was to become the third national office products and furniture wholesale distributor (behind Fortune 500 listed United Stationers and very large SP Richards). Now, I am not an expert in business strategy, but to paraphrase the former Chairman of General Electric, Jack Welch (who is an expert), be number one or number two in your industry / region / niche, or get out of the business.
Unfortunately no one who was involved with Office Source took Mr. Welch's advice, because there were a lot of "smart" people who sold/traded/gave their well run businesses to Office Source, for a combination of cash and (ultimately worthless) stock. History has shown that these "roll-ups" rarely end well (anybody remember United States Office Products - USOP), and Office Source was no exception. As documented above, management made a "hail Mary" pass to an Alaskan Native financial group (if you have to leave the lower 48 for financing, that might be a red flag...) -- but alas, it was not enough to save the company.
Insiders have told me that there was some last minute negotiating with United Stationers going on -- but United didn't get onto the Fortune 500 by being soft, and I'm sure they saw the obvious, which was they could simply let the company go into bankruptcy and pick up the assets they wanted without any of the liabilities.
Fast forward from the Office Source bankrupcty of November 09, to yesterday (March 4, 2010), and viola - United Stationers unveils their brand new stand alone United Stationers Furniture Division, complete with a number of the former Office Source "assets", running key parts of the division. I recognize some of the key names that made the transition, and I'm glad (and not surprised) that United saw through the smoke and mirrors, and picked up the right assets.
Moral of the story -- business basics never go out of style... (no matter how cool the website looks)...
