Global News



Nebraska, USA
Nebraska auditor slams depot
The Nebraksa state auditor has concluded that Office Depot has been responsible for "serious pricing errors and overcharges" in its $3 million per year contract with the state.
Mike Foley said that the problems with the contract have been a monthly occurrence from the very first Office Depot invoice to the present. "Office Depot is playing fast and loose with the privilege of doing business with the State and they ought to be held accountable," he said in his report.
"Taxpayers deserve honest business practices and Office Depot needs to clean up its act."
The three-year contract expired on 31 May and instead of exercising a built-in extension clause, the state has put the whole contract out for a new bid.
The University of Nebraska, which has a separate $3.3 million contract with Office Depot, has engaged the services of a private investigative firm to review the billings submitted by Office Depot to the university.
"I would not be the least bit surprised if the investigators eventually find problems with that contract as well," speculated Foley.
Office Depot said that it was reviewing the Nebraska auditor’s report.


Florida, USA
Odland hits back at dealers
Office Depot CEO Steve Odland accused the independent office dealer channel of spreading misinformation about recent pricing issues with state contracts.
Speaking during the company’s first quarter conference call, Odland said that a "well-organised, well-funded small office products dealer association led by some well-funded consultants [was] spreading misinformation and attempting to do damage to all players of the large companies who have won these contracts". Odland reasoned that this was the way that the independent dealers had decided to compete as they were worried that Office Depot would keep taking federal business from them.
"We have saved these states millions and millions of dollars," he stated.
Sheffield, UK
Vow factor for Kingfield Heath
From 1 June the combined Kingfield Heath and ISA Wholesale business will trade under the name Vow.
"We chose the name to reflect the values of our new combined wholesale business," said marketing director Helen Beckett.
The move has been taken to allow the wholesaler to develop a coordinated business strategy with its reseller customers and supplier base, the company says.
"The new name confirms our ongoing commitment to industry leading customer service levels and an exclusive focus on supporting our reseller customers in the UK and Ireland to the best of our ability," added Beckett.
The holding company for the Kingfield Heath and ISA operations recently changed its name to Vasanta Group, though the names Vasanta and Vow are not related, a Kingfield Heath spokesperson told OPI.


Stockholm, Sweden
Whitelines ties up CO2 neutral deal with StoraEnso
Whitelines, the Swedish maker papers and notebooks, has signed an agreement with StoraEnso to use the paper manufacturer’s carbon neutral MultiCopy Original paper in all its products.
"Taking concrete steps to reduce CO2 and other emissions is an important issue for the OP industry," said Whitelines CEO and founder Roland Elander.
"This agreement with StoraEnso means that Whitelines products will reduce CO2 on all products by approximately 30 percent."


Illinois, USA
Max hit by lower sales
OfficeMax reported substantially lower first quarter sales in both its retail and contract divisions.
Retail same-store sales nosedived by 8.7 percent compared to the first quarter in 2007, with declines in all major product categories.
The company blamed weaker US consumer and small business spending and the negative impact of the Easter holiday occurring in the first quarter of 2008.
Contract sales fell by 12.4 percent in the US, while international contract operations posted a slight decrease of 0.9 percent.
OfficeMax CEO Sam Duncan commented: "In the first quarter, we continued to experience lower sales levels in both our contract and retail segments reflecting the weaker US economy and our more disciplined, analysis-driven approach to sales generation and retention.
"Despite challenges in certain parts of our business as we navigate the weaker US economy, we continue to advance the strategies of our turnaround plan."
Florida, USA
Depot blames economy for Q1 earnings drop
Office Depot continued to blame the US housing market slump as its first quarter earnings fell by 55 percent compared to 2007.
Depot posted net profits of $69 million compared to $154 million a year ago, while overall sales fell by 3 percent to $4.0 billion.
The company says that both its US retail and contract divisions were hard hit by their exposure to the California and Florida markets where the credit crunch problems have been particularly hard-felt. Each division does around 30 percent of its business in these two states.
The North American Retail division saw same store sales drop by 9 percent and operating profit margins slide from 8.2 percent of sales in 2007 to 4.8 percent.
The North American Business unit suffered a 5 percent decline. A fall of 12 percent amongst small business customers was partially offset by slight growth of large national and public sector accounts.
Meanwhile, the stuttering UK and French economies were blamed for a 4 percent decrease in local currency sales for Office Depot’s international division.
London, UK
DSG announces turnaround plan
Leading European electronics retailer DSG international has laid out its programme for a "renewal and transformation" of the group.
In the five-point plan, DSG says it will close almost 80 of its stores in the UK over the next five years, revamp its store formats in the UK and Italy, improve its product and services portfolio to better meet the expectations of customers, roll out its Pixmania online format in all its markets and implement cost-cutting measures totalling £50 million ($97 million).
The plan was unveiled by CEO John Browett, who was appointed six months ago and charged with turning around the fortunes of the group which has seen its share price shed 60 percent of its value in the last year.
Browett said that the financial benefits of the plan should be felt in the 2009/10 financial year and warned that the next 12 months is "expected to be very challenging."
Earlier in the month, DSG said that is was considering closing up to 40 stores at its troubled Italian chain UniEuro where half-yearly same-store sales had fallen by 14 percent.
Illinois, USA
United feels the squeeze
United Stationers reported its first quarter results with pressures on sales, profits and margins.
Overall sales for the quarter increased by 5 percent to $1.25 billion, but included $74 million from the December 2007 acquisition of ORS Nasco. Excluding Nasco, sales actually fell by 1.2 percent.
Net income decreased by almost 22 percent to $21.3 million and operating margin fell by just over 20 percent to 3.5 percent.
Breakroom products continued to be the best performing category, increasing by 15 percent and helping to offset a 5 percent combined sales decline in office supplies, technology products, and office furniture.
CEO Dick Gochnauer said that United has launched additional cost reduction actions and initiatives to offset the impact of weaker sales and cost increases.


Officeworks to sell Dell PCs: Dell has expanded its retail strategy into Australia with the announcement that OP superstore chain Officeworks is to stock the computer maker’s products. Sydney (AUS)
Mead loss worsens: MWV has said that its consumer and office products business posted a first quarter loss of $3 million, compared to $2 million in the first quarter of 2007. Sales for the quarter were up by 3 percent to $208 million. The company said that improved product mix, manufacturing productivity and a solid back-to-school season in Tilibra, its Brazilian business, were offset by volume declines and a $3 million bad-debt charge from the bankruptcy of a customer. Virginia (USA)
Canon in $600 million US investment: Canon has said that it is to invest $600 million in expanding its facilities in Virginia, US. The plans include the construction of a 700,000 sq ft plant for manufacturing laser cartridges, a new research and development centre and the expansion of its cartridge recycling facilities in the state. Almost 1,000 new jobs may be created. Virginia (USA)
Depot and Google in partnership: Office Depot has teamed up with Google to create a new online business resource centre on the office supplier’s website.
The co-branded resource centre provides small business customers with a range of communication, collaboration and marketing tools using well-known Google products such as AdWords and Apps. A focus on small business customers was one of the key strategies outlined in Office Depot’s turnaround plan which emerged out of the recent activist shareholder challenge. Florida (USA)
HP and Foxconn to build PCs in Russia: HP and Taiwanese manufacturer Foxconn have announced the construction of a 300,000 sq ft PC factory in St Petersburg.
The facility is part of a $50 million joint venture between the two companies for the Russian market. HP says that it expects to ship up to 40,000 consumer and commercial desktop PCs per month for the Russian market from the facility. St Petersburg (RUS)