Coworking spaces have started touching base in other sectors of the commercial real estate industry, with offices opening in retail fronts and hotels. Now, Office Depot is cautiously testing out coworking spaces in three of its existing stores across the country.
The workspaces include hot desks, private offices, and conference rooms for a portion of the price of typical coworking spaces.
This move is most likely an effort to keep the company’s trades afloat as its sales continue to struggle. According to the company’s first quarter earnings release, sales dropped 4% over the last year and revenue from its acquired IT services division CompuCom were also down.
“They’re trying to see what sticks,” says Liz Suzuki, lead hardline retail analyst at Bank of America Merrill Lynch. “They are definitely turning their attention towards services.”
Suzuki said that coworking would be a good way to drive traffic into the stores and proves the company is finding unique ways to use their real estate assets. Physical retail operations also help add a personal touch to the sale of its services, such as copy and print, tech support, and others.
Despite its struggling sales, Office Depot’s Business Solutions Division had double digit service revenue increases in the first quarter.
Still, Suzuki expressed concerns over whether the company could weather an economic downturn without have strength in their core offerings; but if the company’s coworking rollout becomes more concrete, it could be great for business.