Dive Brief:

• The U.S. Postal Service announced in a letter to the American Postal Workers Union, AFL-CIO that the deal between the postal service and office supplies retailer Staples has ended, the APWU said in an email to Retail Dive.

• Staples will be removing all signage and will discontinue postal services at its roughly 500 U.S. locations that handle postal services by the first week of March. In response, APWU is calling off its boycott of Staples effective immediately, the union said.

• Also Thursday, Staples announced it has appointed Jeff Hall to the newly created role of Chief Administrative Officer and Vice Chairman, reporting directly to CEO Shira Goodman. Hall will take up his duties overseeing finance, strategic planning, corporate development, investor relations, real estate, customer service and high-growth markets Jan. 9. Staples vice chairman Joseph G. Doody additionally announced that he will retire effective Sept. 30. 

Dive Insight:

The APWU is declaring victory in its war against the 2013 USPS-Staples deal, with the union had characterized as a major step toward privatization of the postal service. 

“This is a big win,” APWU President Mark Dimondstein said in an email to Retail Dive. “Staples is out of the mail business which they should never have gotten into. Our members take great pride in their training and their responsibilities; they swear an oath; they perform a public service. The quality of service at a Staples store isn’t comparable. The public should have confidence in the mail. Important letters, packages and business correspondences shouldn’t be handled like a ream of blank paper.”

Indeed, during the case, it emerged that Staples employees often mishandled mail, failing to apply appropriate postage in some cases, for example. Dimondstein said the setup threatened “the security and the sanctity of the mail, the training of clerks, and proper oversight were tossed out the window. This was bad for the consumer, bad for the USPS brand and an insult to our dedicated members.”

In November, National Labor Relations Board Administrative Law Judge Paul Bogas agreed that the deal represented improper subcontracting within the bargaining agreement between the postal service and the union, and said the postal service had failed to take the deal to union members. In a major blow, the NLRB on Wednesday upheld the judge’s ruling, and the APWU says the post office promised in a letter Thursday to cease the postal operations within its stores.

Staples spokesperson Carrie McElwee confirmed to Bloomberg that more than 500 of its stores will end the USPS program, but that a similar deal with United Parcel Service will continue. 

It’s unclear what the long-term effects of the decision may be for either the USPS or Staples. The move could keep some customers away from Staples stores at a time when the retailer is already experiencing much slower traffic and diminished in-store sales: It's still searching for a clear path forward following its failed $6.3 billion merger attempt with rival Office Depot, and has said it will work to dominate in core office supply categories like ink, toner and paper. At the same time, however, the absence of USPS services could shift some Staples patrons to UPS.

Goodman, installed as Staples' CEO in late September, offered her own perspective on Staples' new approach in a conference call with analysts last year. “[W]e’re in the early innings of a dynamic and pronounced strategic repositioning," she said. "We're moving from a product focus to a customer focus. We're moving from a retail culture to a delivery culture. We're evolving from a high/low pricing strategy to more everyday value. We're transitioning from a products company to a products and services company.”

Goodman also said at that time that Staples would look to acquire other companies to drive growth, even as it moves to focus on its operations in North America. The company divested its European assets in September with a sale to investment firm Aurelius, and unloaded its U.K. retail business and operations to British restructuring firm Hilco Capital Limited two months later.