Tag: Office Depot

Office Depot sells off Korean business

Office Depot has closed on the sale of its business in South Korea to private equity firm Excelsior Capital Asia.

Office Depot had previously disclosed its intention to sell the majority of its international businesses under a process that began in 2016.

“This transaction follows on the recently announced agreement to sell our businesses located in Australia and New Zealand,” Gerry Smith, CEO of Office Depot. “We are now one step closer to achieving our goal of divesting substantially all of our international businesses in order to focus on the growth opportunities available in the North American market.”

Excelsior Capital Asia is described as a Hong Kong and South Korea-based direct investment firm.

Source: www.stationerynews.com.au

From Silicon Valley to staplers

Office Depot has named a successor to CEO Roland Smith, who previously announced his intention to retire from the company. The company also named a new chairman.

The retailer has appointed Gerry P. Smith as CEO, effective 27 February. Smith currently serves as executive VP and COO of Lenovo Group, a $45 billion global technology company.

Smith joined Lenovo in 2006 and was instrumental in the company’s growth to become the largest personal computer company, according to a statement by Office Depot. Prior to Lenovo, Smith held executive positions at Dell, from 1994 until 2006.

“Gerry possesses significant operating expertise, having successfully led business units across Lenovo’s entire product portfolio, including an industry recognized supply chain organisation,” says Warren Bryant, lead director of the board of directors and chair of the CEO search committee. “His long-standing relationships with some of Office Depot’s largest suppliers will enable him to quickly transition into the role.”

Although Smith previously announced his intention to continue as chairman, Office Depot is replacing him with director Joseph Vassalluzzo as chairman, effective 27 February, according to the news release. Vassalluzzo joined Office Depot’s board in August 2013 and is now Chair of the Finance and Integration Committee. He was previously the vice chairman at Staples.

Smith joined Office Depot as CEO in 2013, just after the company completed its merger with OfficeMax. The chain has been struggling to reposition itself since its merger with Staples was called off amid antitrust concerns.

“Roland has been an outstanding CEO and, on behalf of the entire board, I’d like to express our sincere appreciation for his leadership,” says Bryant. “He has consistently delivered positive results, led the successful integration of Office Depot and OfficeMax to achieve synergies and efficiencies significantly exceeding original expectations, and he created and implemented a new three-year strategic plan. As a result of his contributions, the company is well positioned for continued future success.”

By Marianne Wilson for www.chainstoreage.com

While the sale of Staples and OfficeMax in Australia and New Zealand remains unresolved, there are some interesting observations to be made in respect of the confirmed sell-off of both companies’ European businesses.

In 2016, OfficeMax’s parent company Office Depot Inc. announced the completion of the sale of its European business to The Aurelius Group. This transaction is part of the company’s previously announced international divestiture strategy to focus on opportunities in its North American business.

In December last year, Staples announced the sale of a controlling interest in its European operations to Cerberus Capital Management.

Staples will retain a 15 per cent interest in the business and will be represented on its board of directors.

Staples said that one of its top strategic priorities has been to narrow its geographic focus on North America, and the sale was a step towards “simplifying its operations and better positioning Staples for sustainable long-term growth”.

The agreement with Cerberus follows Staples’ sale of its UK retail business to Hilco Capital Limited.

The simultaneous retreat from the international marketplace underlines the challenge for large contract office supplies businesses and retailers to turn a profit in the digital age, where margins are extremely thin for middlemen who are caught in a pricing trap of their own making.

The office products industry in Europe now has three investment companies in its midst and, as we all know, private investment companies have one thing on their collective mind when they take over an ailing or under-performing business – and that is to make a relatively quick profit.

So who are Aurelius, Cerberus and Hilco and how do they intend to make a quid out of traditional office and education supplies businesses?

Munich-based Aurelius has revenues of around EUR4.5 billion and the Office Depot deal is its largest to date in terms of revenues.

The company said its plan is to continue implementing the measures that have already been initiated to revitalise Office Depot Europe directly and partly through local partners and the management on the ground.

The aim is to expand on growth initiatives involving new product and service offerings and the pan-European distribution and logistics network and to push the e-commerce side of the business.

Established in 1992, Cerberus has more than US$30 billion under management invested in four primary strategies: operational private equity, both control and non-control; distressed securities and assets; commercial mid-market lending; and real estate-related investments. From its headquarters in New York, the company has a network of affiliate and advisory offices in the US, Europe and Asia.

According to Cerberus’ senior managing director Steven Mayer, the company aims to enhance Staples’ competitive position across its European markets and channels, and return the business to growth by “capitalising on its many assets, including its well-recognised brands, strong customer relationships, dedicated sales force, advanced distribution and IT infrastructure, comprehensive pan-European footprint, and talented management and associates”.

Staples European business will be separated into a privately-held company controlled by an affiliate of Cerberus. The new company will enter into a licensing agreement with Staples for the use of certain Staples intellectual property, including its brand, a global accounts agreement, and transition services agreement governing a variety of services for defined periods. The company will operate under the Staples banner name and other sub-brands in European markets, and its associates will continue to be employees of Staples Europe, which will maintain its headquarters in Amsterdam.

London-based Hilco Capital (part of US-based Hilco Global which also operates in Australia) currently owns, among other retailers, HMV and was responsible for the successful turnaround of the business over the course of the last four years.

Hilco Capital’s Paul McGowan said the comp[any was looking forward to working with the Staples UK team and while retail in the UK has been challenged recently, a Hilco team led by a retail veteran will work alongside the existing management team to build a plan for success for the business.

The use of the Staples brand will be phased out by the UK retail business over the coming months.

What will happen to the Staples and ‘Max brands in Australia remains to be seen.

By Barrie Parsons, editor at www.stationerynews.com.au

Office Depot has followed through on its plan to offload its European operations with the announcement of a purchase agreement with private equity firm The Aurelius Group.

Office Depot, which owns the OfficeMax business in Australia and globally, had previously disclosed its intention to explore strategic alternatives regarding its European business, under a process that began earlier this year.

“The sale of our European business will allow us to streamline operations and focus our resources on markets that will provide the best opportunity to implement our recently announced three-year strategic plan,” Roland Smith, out-going chairman and CEO for Office Depot, says

Since 2005 Aurelius has completed more than 70 transactions across Europe and specialises in investing in companies and corporate spin-offs, as well as complex divisional carve-outs from corporates.

The transaction is structured as an equity sale, for nominal consideration, with the buyer acquiring the European business with its assets and liabilities.

Annual revenue for the European business is approximately $2,3-billion.

The transaction, which has been approved by Office Depot’s board, is subject to regulatory approval from the European Commission and consultation with the central works council, which represents employees in France. The transaction is expected to close by the end of 2016.

Source: www.stationerynews.com.au

The failed marriage of Office Depot and Staples has claimed another CEO. Nearly three months after Staples chief Ron Sargent made his sad exit, the Depot’s top exec Roland Smith announced his departure.

Smith isn’t leaving immediately but will remain as CEO until a successor is named, so tell Shannon in marketing she can stop pretending to casually stand near his office because we all know she’s just trying to call dibs on his sweet desk blotter.

The outgoing CEO, who hasn’t even been with Office Depot for three full years, is also expected to retain his spot as Chairman of the Office Depot board, according to a statement from the company.

“My decision to retire has not been an easy one. In 2013, I set aside a number of personal ambitions to accept a three-year contract with Office Depot, and it’s now time for me to refocus on those priorities,” says Smith in a statement. “I am extraordinarily proud of what the Office Depot team has accomplished these past three years, and I am confident that we will successfully execute our new strategy and grow shareholder value.”

In Feb. 2015, Staples and Office Depot announced a $6,3-billion merger, nearly two decades after federal antitrust regulators blocked the retailers’ first marriage. Then earlier this year, the Federal Trade Commission sued to block this latest deal,

After nearly a year of investigating the deal, the Federal Trade Commission sued to block the merger, arguing that further consolidation would harm competition nationwide in the market for “consumable” office supplies – pens, paper, sticky notes, etc. – sold to large business customers.

In May 2016, a federal judge sided with the government, putting an end to merger, and to the careers of Sargent and Smith, who joined Office Depot while it was in the middle of successfully acquiring OfficeMax.

Earlier this month, Office Depot announced it would close 300 stores on top of the 400 it had already planned to close by the end of 2016.

By Chris Morran for www.consumerist.com

Three months after its proposed tie-up with larger rival Staples failed regulatory muster, Office Depot has said it will launch a quarterly dividend and close an additional 300 stores as it charts a course for remaining a stand-alone company.

Office Depot completed its strategic review of the business and announced moves such as growing its contract channel, optimising retail operations in North America, implementing multiyear cost reductions and returning capital to shareholders.

Meanwhile, the company said Wednesday it swung to a profit in the latest period, helped in large part by the $250-million breakup fee it had received from Staples, and its revenue was lower. The earnings result, excluding the one-time fee and other special items,declined from a year ago, missing Wall Street expectations.

The company plans to trim $250-million in costs by 2018 and initiated a quarterly dividend program at 2.5 cents a share, payable on Sept. 15 to shareholders of record by Aug. 25. The company didn’t specify job cuts were part of its plan to trim expenses but said it would lower overall general and administrative costs.

Office Depot closed 42 stores in the second quarter, ending the period with 1 513 stores in North America as part of its earlier plan to close 400 stores. But Wednesday it said it would close an additional 300 stores on top of that.
Staples agreed in February 2015 to buy Office Depot for about $6.3-billion. In 2013, the U.S. Federal Trade Commission approved Office Depot’s takeover of the smaller OfficeMax. But the FTC argued its tie-up with Staples would mean higher prices and fewer options for big companies that buy office supplies in bulk.

In all for the June quarter, Office Depot earned $210-million, or 38 cents a share, compared with a year-earlier’s loss of $58-million, or 11 cents a share. Excluding items, earnings were three cents a share, compared with six cents a year earlier. Revenue slipped 6% to $3.22-billion.

Analysts surveyed by Thomson Reuters had projected per-share earnings of six cents on revenue of $3.21-billion.
Shares were inactive in premarket trading.

By Joshua Jamerson for www.wsj.com

Office Depot has appointed Kristin Campbell to its board of directors, and she will also serve on the company’s audit committee. She previously spent 18 years at Staples.

The appointment likely gives the Boca Raton-based company an edge as Office Depot and Staples leave behind merger talks and move forward once again as full-fledged competitors.

“We are excited to welcome Kristin to our board,” Roland Smith, CEO of Office Depot, said in a statement. “Her executive leadership experience, including nearly two decades in the office products industry, brings valuable perspective to Office Depot as the company works to deliver long-term shareholder value.”

Campbell has been executive vice president and general counsel for Hilton Worldwide Holdings Inc., where she is responsible for legal, compliance and government regulations. Before Hilton, Campbell was at Staples, where she was most recently senior vice president, general counsel and corporate secretary. Campbell has also practiced law at Boston-based firms Goodwin Proctor and Rackemann and Sawyer & Brewster.

Having spent nearly two decades at Staples, Campbell can likely provide valuable insight into the operations of Office Depot’s biggest competitor. The two companies remained rivals even as Staples spent more than a year fighting the Federal Trade Commission and other regulators in its unsuccessful efforts to acquire the Boca Raton-based office supplies retailer for $6.3 billion. Competition is fierce as the companies continue to lose money and close stores.

Staples and Office Depot are the No. 1 and No. 2 office supply retailers in the U.S., and Office Depot is one of South Florida’s largest public companies, employing close to 2 000 people at its headquarters in Boca Raton.

By Emon Reiser for www.bizjournals.com

Office Depot launches BTS recycling

Office Depot has announced the launch of its Binder Recycling Programme, encouraging shoppers to help preserve the environment by recycling old binders.

Shoppers can bring any old empty binder to an Office Depot or OfficeMax retail location and receive a $2 instant discount off a same-day binder purchase.

The programme is in partnership with TerraCycle, a company whose primary objective is to recycle waste that is typically considered non-recyclable. Consumers find recycling to be the most easily understood component of sustainability, and Office Depot is partnering with TerraCycle to help consumers participate in the movement for a more sustainable planet.

“We’re excited to partner with TerraCycle this back-to-school season as parents, teachers and students prepare for the school year with new supplies,” says Ron Lalla, executive vice-president of merchandising for Office Depot.

“The programme provides a way to recycle binders in an environmentally conscious way while also offering a discount to shoppers who are looking for new ones.”

Customers can recycle as many binders as they wish and can receive instant discounts for up to six binders per day. The offer is only valid in-store at Office Depot and OfficeMax retail locations.

Source: www.businesswire.com

Just one month after a judge put the kibosh on a merger between America’s two biggest office supply retailers, the companies are going head-to-head to win customers.

In preparation for one of its busiest sales periods of the year, Office Depot says it will hire 33% more US workers this summer, to beef up its customer service for teachers, students and parents during the back-to-school season. That translates to an additional 2 000 workers compared with last summer, for a total of 8 000 new hires.

The news comes a day after Staples, the larger of the two competitors, said it will offer same-day delivery in several major markets for a fee of $14.99.

“This is our big season, the back-to-school season, so this is when we do the most of our seasonal hiring,” Lynn Gross, Office Depot’s vice president of human resources for retail, told CNBC. “[This year’s boost is] not necessarily related to the merger, but it definitely, I think, is a sign that we are moving forward as a stand-alone company and focused on providing superior customer service.”

Gross said most of the summer hires will assist with in-store needs such as stocking shelves, helping customers and working the checkout register. The retailer is also putting a big emphasis on its buy online, pick up in store service, so the hires will also help with those needs. However, Gross said the seasonal employees’ duties will fall roughly in line with previous summers.

Because the retailer closed 181 US stores in 2015, the incremental hires will translate into about five more employees per store, she added.

Seasonal associates typically work 22 to 28 hours a week, and their time does not cut into existing employees’ hours, Gross said. In general, seasonal employees work from July through September, depending on a market’s school calendar. Though Office Depot could not provide specific numbers, some of these employees are brought on permanently.

Gross declined to comment on pay, except to say that the company’s compensation practices vary by market, and that it does its best to stay competitive.

Staples did not respond to CNBC’s request for information on its back-to-school plans.

Since a May court ruling declared Office Depot and Staples’ merger a bust, analysts have questioned whether both could continue to exist as stand-alone companies. Staples management was quick to lay out its plan for growth, which includes closing more of its North America stores and ramping up its offerings for businesses. Its recovery plan hit a bump last week, when CEO Ron Sargent resigned.

As for Office Depot, management has offered few details regarding its strategies. The company said it has hired consulting firm Bain & Co. to assist with identifying strategic alternatives, and last month, it announced a $100-million stock repurchase programme.

In their attempt to merge, the two retailers argued Amazon was transforming the market for office supplies. But that argument was rejected.

By Krystina Gustafson for www.cnbc.com

Steven Schmidt, executive vice-president and president, International, of Office Depot, has announced his intention to retire from the company effective 27 May, 2016.

Schmidt was responsible for managing the company’s international businesses in Europe, Asia, New Zealand, Australia and Mexico.

Previously, Schmidt served as President of International for Office Depot. He brought to the company more than 30 years’ diverse business expertise and leadership.

Before joining Office Depot in 2007 as president, North American Business Solutions Division, Schmidt was with ACNielsen Corporation, where he spent 12 years in senior management roles such as president and CEO.

Prior to ACNielsen, Schmidt spent eight years at Pillsbury Food Company, serving as the company’s president of Canada and Southeast Asia. He also held management positions at PepsiCo and Procter & Gamble.

Schmidt is a graduate of Purdue University and holds a BA in Industrial Administration. He is a member of the boards of the Purdue Research Foundation and Krannert School of Management.

Source: www.reuters.com and www.news.officedepot.com
Photo: OPI.net

  • 1
  • 2
  • 4

Follow us on social media: 

               

View our magazine archives: 

                       


My Office News Ⓒ 2017 - Designed by A Collective


SUBSCRIBE TO OUR NEWSLETTER
Top