The ODP Corporation (ODP): History, Ownership, Mission, How It Works & Makes Money

Ever wondered how The ODP Corporation maintains its significant presence in the business solutions market, navigating shifts with reported sales reaching nearly $1.8 billion in just the first quarter of 2024?

This entity, generating approximately $7.8 billion in total sales for the full fiscal year 2023, operates far beyond traditional retail; it's a dynamic B2B distribution platform offering business services, products, technology solutions, and a sophisticated supply chain network through divisions like ODP Business Solutions and Veyer.

But how did this evolution occur, and what strategies underpin its current market standing and diverse revenue streams?

Are you ready to delve into the history, the mission driving its operations, and exactly how it generates income in today's competitive landscape?

The ODP Corporation (ODP) History

The ODP Corporation's Founding Timeline

The journey began not as ODP, but as Office Depot.

Year established

1986

Original location

Lauderdale Lakes, Florida

Founding team members

F. Patrick Sher, Stephen Dougherty, and Jack Kopkin

Initial capital/funding

The founders identified a gap in the market for discounted office supplies sold through warehouse-style stores. While exact initial funding figures are difficult to pinpoint publicly, the venture was launched leveraging the founders' retail experience and personal capital, quickly attracting further investment as the concept proved successful.

The ODP Corporation's Evolution Milestones

From a single store to a complex holding company, the path involved significant growth and change.

The ODP Corporation's Transformative Moments

The merger with OfficeMax fundamentally reshaped the competitive landscape for office supplies retail, creating scale but also significant integration challenges.

Pivoting towards B2B and services, exemplified by the CompuCom acquisition (though later divested), signaled an attempt to adapt to declining traditional retail and the rise of digital commerce. You can learn more by Exploring The ODP Corporation (ODP) Investor Profile: Who’s Buying and Why?

The 2020 restructuring into a holding company model marked a pivotal strategic decision, allowing distinct focus on different business units like ODP Business Solutions and Veyer, aiming for optimized performance and potential future separations or sales of divisions. As of 2024, this structure defines its operational approach.

The ODP Corporation (ODP) Ownership Structure

The ODP Corporation operates as a publicly traded entity, meaning its ownership is primarily distributed among large institutional investors and the general public. This structure shapes its corporate governance and strategic decision-making processes.

ODP's Current Status

As of the end of 2024, ODP is a public company. Its shares are traded on the NASDAQ stock exchange under the ticker symbol ODP, making it subject to SEC regulations and public market dynamics.

ODP's Ownership Breakdown

The ownership landscape at the close of 2024 was dominated by institutional shareholders, reflecting confidence from large investment firms. The breakdown provides a clearer picture:

ODP's Leadership

The day-to-day operations and long-term strategy of ODP are managed by its executive team, under the oversight of the Board of Directors. To fully grasp their approach, consider reviewing the Mission Statement, Vision, & Core Values of The ODP Corporation (ODP). Key leadership figures guiding the company at the end of 2024 included:

• Gerry P. Smith served as the Chief Executive Officer, responsible for overall strategy and performance.
• David Centrella held the position of Executive Vice President & Chief Financial Officer, overseeing the company's financial operations.
• Joseph S. Vassalluzzo acted as the Non-Executive Chairman of the Board, leading the board's governance responsibilities.

The ODP Corporation (ODP) Mission and Values

The ODP Corporation articulates a clear purpose that extends beyond mere financial results, focusing on empowering workplaces and driving business success for its customers. This ethos is embedded in its formal mission and core values, shaping its strategic direction and operational priorities.

The ODP Corporation's Core Purpose

Understanding the company's foundational principles offers insight into its culture.

Official mission statement

To be a leading provider of business services, products and digital workplace technology solutions through an integrated B2B distribution platform.

Vision statement

To empower workplaces of today and tomorrow, helping our customers succeed.

Company slogan

While specific taglines like Office Depot's 'Taking Care of Business' exist at the brand level, The ODP Corporation's focus remains on its B2B platform and solutions portfolio.

Core Values: The 5C Culture

The company operates under a framework known as the 5C Culture, guiding employee actions and company strategy. These values represent the core tenets of how the organization functions internally and engages externally. You can explore more about the Mission Statement, Vision, & Core Values of The ODP Corporation (ODP).

• Customer: Placing the customer at the center of all decisions and actions.
• Commitment: Demonstrating dedication to stakeholders and company goals.
• Change: Embracing agility and adapting to evolving market dynamics.
• Caring: Fostering a supportive environment for employees and communities.
• Creativity: Encouraging innovation and new solutions to meet customer needs.

These principles collectively define the operational philosophy and long-term aspirations guiding The ODP Corporation as it navigated the business landscape in 2024.

The ODP Corporation (ODP) How It Works

The ODP Corporation operates primarily as a business-to-business distribution company, providing workplace essentials, technology, and services through multiple channels, supported by its integrated supply chain and procurement platforms. It connects suppliers with a broad customer base ranging from small businesses to large enterprises, leveraging both digital and physical footprints.

The ODP Corporation's Product/Service Portfolio

The ODP Corporation's Operational Framework

ODP's value creation hinges on its integrated model. Veyer, its logistics arm, manages a sophisticated supply chain, handling sourcing, inventory management, and distribution across North America. This network supports both the ODP Business Solutions division, fulfilling large contract orders often with next-day delivery promises, and the Office Depot retail division's store replenishment and online order fulfillment. ODP Business Solutions utilizes a dedicated sales force and digital tools to manage relationships with contract customers. The Office Depot division operates physical stores and an e-commerce site focused on transactional sales. Varis represents a strategic push into digital commerce, offering a B2B platform designed to streamline procurement for larger organizations, functioning somewhat independently but leveraging ODP's supplier relationships and logistics capabilities. This multi-pronged approach allows ODP to serve diverse customer needs across different scales.

The ODP Corporation's Strategic Advantages

ODP possesses several key strengths enabling its market position as of 2024.

• Established B2B Focus: The ODP Business Solutions division provides a strong foundation with recurring revenue streams from contract customers, representing the majority of company sales (over 60% based on recent fiscal year data).
• Integrated Supply Chain (Veyer): A significant competitive advantage lies in its owned logistics network, enabling efficient distribution, cost control, and potentially offering services to third parties, creating new revenue streams.
• Scale and Purchasing Power: Its size allows for favorable purchasing terms with suppliers, benefiting pricing across all divisions.
• Digital Transformation Initiatives (Varis): Investment in the Varis platform signals a forward-looking strategy to capture more of the B2B digital commerce market, moving beyond traditional product sales. Exploring The ODP Corporation (ODP) Investor Profile: Who’s Buying and Why?
• Brand Recognition: The Office Depot name retains significant brand awareness, particularly beneficial for the retail and SMB-focused segments.
• Operational Discipline: Ongoing efforts focus on cost management and optimizing the retail footprint to align with changing market demands.

The ODP Corporation (ODP) How It Makes Money

The ODP Corporation primarily generates revenue through the sale of business supplies, technology products, furniture, and workplace services to businesses and consumers via its integrated B2B distribution platform and retail network.

The ODP Corporation's Revenue Breakdown

Based on performance trends leading into late 2024, the revenue contribution is segmented across its core divisions.

The ODP Corporation's Business Economics

The company operates on a model balancing direct B2B sales, retail footprint, and increasingly, logistics services through Veyer. Pricing strategies vary, with contract pricing dominating the B2B segment and promotional pricing common in retail. Key economic factors include managing cost of goods sold (COGS), which typically represents around 76-77% of sales, and optimizing selling, general, and administrative (SG&A) expenses, hovering near 19-20% of sales. The strategic shift emphasizes higher-margin services and B2B relationships to offset pressures in the traditional retail channel. Understanding the dynamics between different customer segments is crucial for anyone analyzing the company; Exploring The ODP Corporation (ODP) Investor Profile: Who’s Buying and Why? provides deeper insights into the investor base. Gross margins were approximately 23.5% in recent reporting periods for 2024.

• Emphasis on cost management and operational efficiency across divisions.
• Investment in digital capabilities to support B2B growth.
• Leveraging the Veyer supply chain for internal and external clients.

The ODP Corporation's Financial Performance

As of late 2024, financial performance reflects ongoing business transformation. Total company sales through the first nine months of 2024 were approximately $6.06 billion, showing a decrease compared to the prior year, primarily driven by lower retail sales partially offset by Veyer's growth. Adjusted operating income remained a key focus, with figures indicating operational resilience despite top-line pressure; for the first nine months of 2024, adjusted operating income was around $231 million. The company maintained a focus on shareholder returns, executing share repurchase programs. Strong free cash flow generation continued to be a priority, supporting debt reduction and strategic investments, with projections aiming for positive free cash flow for the full fiscal year 2024, consistent with performance in recent years where it often exceeded $250 million annually.

The ODP Corporation (ODP) Market Position & Future Outlook

The ODP Corporation continues its strategic pivot towards a B2B-centric model, leveraging its distribution network and digital platforms amidst a challenging office products landscape. Its future hinges on successfully scaling its Veyer logistics and Varis procurement divisions while optimizing its traditional retail footprint.

Competitive Landscape

The market for business supplies and services remains highly fragmented and competitive, with pressure from both traditional players and large e-commerce platforms.

Opportunities & Challenges

Navigating the evolving market presents both significant growth avenues and potential hurdles.

Industry Position

ODP is actively repositioning itself from a legacy office supply retailer to an integrated B2B distribution and services company. While facing secular headwinds in traditional categories, its investment in logistics (Veyer) and digital procurement (Varis) represents a significant strategic shift aimed at capturing higher-growth B2B market segments. The company holds established relationships with large enterprise clients but faces fierce competition for SMB customers. Understanding its financial footing is crucial for assessing its ability to fund this transformation; investors often look closely at liquidity, debt levels, and profitability trends. For a deeper dive, consider Breaking Down The ODP Corporation (ODP) Financial Health: Key Insights for Investors. Its success will depend on effectively executing this complex transition and differentiating its offerings in a crowded marketplace, particularly against digitally native competitors and established giants like Staples.