The last month has been a busy one dominated by the latest set of quarterly results and, again, public sector contracts in the US.
The decision by LA County/US Communities to award its office supplies contract to is.group has given the independents a great chance to show that they can compete with the power channel. This comes on the back of Florida’s recent multiple award that included a local dealer, and Calfornia is being tipped to make a similar award shortly.
is.group hasn’t been handed US Communities on a plate, and it looks like a right royal battle over the next few months as the dealer group, former contract holder Office Depot, and Staples all vie for the estimated $500 million in annual sales.
Quarterly results were generally positive. However most gave cautious outlooks for the rest of the year, reminding us of the fragility of the recovery. Let’s hope for a good Back-To-School season in the Northern hemisphere.
Hurd quits HP…
Palo Alto (CA), USA
HP’s Chairman and CEO Mark Hurd has resigned from the company with immediate effect following an investigation into claims that he sexually harassed a former HP contractor.
Following Hurd’s resignation in August, it was revealed that the contractor was Jodie Fisher, a former actress who also appeared on a US TV reality show in 2007.
Fisher worked for HP at executive and high-level customer summit events in the US and abroad between 2007 and 2009 and has denied having an affair or a sexual relationship with Hurd.
The investigation determined there was no violation of HP’s sexual harassment policy, but did find violations of HP’s standards of business conduct, thought to be related to inaccurate expenses claims that Hurd made.
Hurd said that the decision to resign after five years in charge at HP was a "painful" one.
"As the investigation progressed, I realised there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP and which have guided me throughout my career," he said.
He added: "I believe it would be difficult for me to continue as an effective leader at HP and I believe this is the only decision the board and I could make at this time."
CFO Cathie Lesjak will take up the CEO role on an interim basis while the company begins its search for a replacement for Hurd.
During Hurd’s five-year tenure as CEO, HP’s sales have grown by around $40 billion to over $120 billion and profit margins have grown impressively as the company upped its focus on the more lucrative IT services segment, most notably with the $14 billion acquisition of EDS in 2008.
NOPA angered by New Jersey decision
Alexandria (VA), USA
US office products trade association NOPA has spoken out against the recent decision by the State of New Jersey to renew its piggyback office supplies contract with Staples.
NOPA already has an appeal pending before the New Jersey Superior Court, Appellate Division, on the state’s 2009 decision to shift from using a dozen or more local small businesses to the single-source cooperative contract that Staples hold with the NJPA (National Joint Powers Alliance).
Staples’ current NJPA contract expires on 31 July, but has been renewed for a period of four years.
NOPA says that this latest decision was taken despite "strong evidence" that – based on in-depth product comparisons – prior state contracts with small, New Jersey dealers offered pricing that was at least 20 percent lower than available under the current Staples contract.
"This contracting decision has been taken at a time when New Jersey’s economy and state budget are in disastrous shape, and directly conflicts with the Governor’s first Executive Order and publicised efforts to set the state’s economy back on the right track by rejecting the economically destructive and protectionist ways of the past," said Chris Bates, President of NOPA.
He continued: "Regrettably, it seems procurement officials have yet to embrace the Governor’s economic development policies intended to promote New Jersey-based small businesses. Single award government contracts have been discredited in our industry and others because there is no ongoing competition."
…while Kristiansen joins Staples
Lyreco’s Asia-Pacific Managing Director Anders Kristiansen has joined Staples.
The surprise news came just two months after it was announced that he was to leave Lyreco after ten years, the last seven as Managing Director for its Asia businesses.
At the time it was thought that Kristiansen was staying in Asia to pursue his career outside the office supplies industry. However, he has assumed responsibility for the Chinese operations of rival Staples. While Lyreco has its Asia HQ in Shanghai, it currently has no trading activity in China itself.
Kristiansen was once considered a potential successor to CEO Eric Bigeard. Bigeard told OPI that hewas "disappointed" to hear the news.
Walmart sees sluggish US sales
Bentonville (AR), USA
The world’s largest retailer, Walmart, has seen same-store sales in the US fall for the fifth consecutive quarter.
Walmart said that its customers continue to spend cautiously as comparable second quarter sales in its US stores fell by 1.8 percent.
Total sales were flat at $64.7 billion. As well as the continuing softness in the market, Walmart has suffered from some merchandising issues and has announced a return to its ‘Action Alley’ discount aisles after moves to offer steep rollbacks throughout stores failed to generate the expected levels of sales. Walmart also said that back-to-school shoppers were delaying their purchases until nearer the startof the new school year.
Sales were slightly better at Walmart’s Sam’s Club warehouse club where comparable sales increased by 1 percent, but Sam’s Club said that business memberships still faced headwinds with the challenges that many small business owners are encountering.
For the third quarter, comparable sales at Walmart branded stores are expected to be in the minus 2 to plus 1 percent range, while Sam’s Club is forecasting sales of flat to up 2 percent.
Outside the US, Walmart posted strong sales in emerging markets such as China, Brazil, Mexico and India. Same-store sales at Walmart’s Asda chain in the UK were down by around 0.5 percent, and the company said that it expected a challenging 12-18 months in the UK following tax increases and government spending cutbacks.
Grand design for Post-it billboard
St Paul (MN), USA
3M displayed the largest ever artistic billboard made of Post-it notes last month in New York.
The billboard – which is made up of over 100,000 Post-its – was displayed in the Vanderbilt Hall at New York’s historic Grand Central station and comes as part of 3M’s 30th anniversary campaign for its iconic Post-it brand.
3M, in association with not-for-profit organisation Publicolor, held a national Student Design Contest, asking students to create original billboard designs usingonly Post-it products that fit the theme, "In 30 years I will…".
The winning entry was from two students from Florida who saw their artwork transformed into the 150 sq m billboard by conceptual artist, Eric Daigh.
Angela Kinsey, star of the US version of the TV series The Office, presented the two students with a $5,000 cheque.
Bill Smith, VP and General Manager, 3M Office Supplies Division, commented: "The goal of the Post-it Brand 30th Anniversary Student Design Contest was to challenge students to think outside the box and make thought-provoking artwork. The variety of creative responses was truly amazing."
New reseller division at Robert Horne
UK paper merchant Robert Horne has created a new division dedicated to the office reseller market.
The new division has a team of account managers and marketing support designed to help resellers maximise the potential of their paper category and is headed by Divisional Director, Paul Farrell.
As well as its range of paper, Robert Horne will now be complementing this with other products such as commercial envelopes and packaging materials such as Mail Lite envelopes, Kraft paper, tape and bubble wrap, all of which can be delivered next day along with regular paper orders.
The range of products is set to increase over the coming months as Robert Horne aims to take advantage of the scale of its purchasing power.
"Our core expertise sits in procurement, stock management and logistics, meaning that our operation lends itself well to providing many other products delivered in bulk to our reseller customers that can often be costly and time consuming for the reseller to source independently," said Farrell.
However, Farrell added that Robert Horne was not trying to compete as a supplier of office products. "What really differentiates us is our ability to provide resellers with the tools to make more money out of the products they sell," he continued.
"As volumes in many categories decline, we all need to find ways of selling smarter and maximising margins.
Our business isn’t about just selling a basket of products at a price, it’s about helping the reseller to gain the best possible return from their selling and marketing activities.
"This doesn’t mean that we’re moving away from paper. Quite the opposite; it will always be core to our business and our reseller customers. We ultimately aim to significantly grow our share of paper within the reseller channel."
Computer Cleaning Week returns
OP vendor Durable’s Computer Cleaning Week returns this month for the fifth year.
This year the message of the UK market campaign is, "Is your keyboard a Bacteria Cafeteria – IT COULD MAKE YOU SICK!", with imagery of bugs and germs that can be found breeding in keyboards.
New to the 2010 campaign is a consumer campaign promoting the importance of clean and hygienic computer equipment on social networking sites Facebook and Twitter.
Stewart Anderson, VP of Marketing at Durable, commented: "To be able to directly communicate and educate consumers on the workplace health hazards they face everyday is very worthwhile for the campaign."
Steady growth for Q-Connect brand
European office products distributors alliance InterACTION says that sales of its Q-Connect brand were up 6 percent in the first six months of 2010.
The increase means that Q-Connect sales for the period were over N55 million ($71 million).
According to InterACTION Managing Director, Jan Van Belleghem, there was growth in nearly all countries, including a good start from new members in Scandinavia and Italy.
"Our relentless efforts in creating brand loyalty through offering a wide range of daily office products with an appropriate quality and design, combined with end-user support through our website, are starting to pay off," he said.
Mergers and acquisitions
Fuji Xerox Australia is targeting the small business market after acquiring the country’s leading independent provider of managed print services (MPS), Upstream Print Solutions. Founded in 1995, Upstream has about 3,500 mainly small and mid-sized clients and has annual sales of around A$100 million (US$92 million). The deal enables Fuji Xerox, which serves mainly large corporations, to develop its MPS offering in the SMB market. Sydney-based Upstream will operate as an autonomous subsidiary of Fuji Xerox Australia and maintain print device neutrality in its MPS integration.
UK stationery and labels manufacturer RD Industries has been bought out of administration for a reported price of £500,000 ($790,000) by rival firm West Design Products. RD Industries went into administration and ceased trading at the end of July after failing to secure a bank loan to fund working capital requirements. West Design said it would take back about half of RD’s 75 employees immediately and could take on more former staff if it is able to win back customers.
Two manufacturer rep groups in the northeast of the US have merged. Following the retirement of Harvid Sales President, Roger Gilbert, the Harvid team led by Peter Holden is joining fellow New Jersey rep group Source Group.
"Our manufacturers have been extremely supportive in this strategic move and we look forward to continued growth in this down economy," said Source Group founder Ron Zuzovsky. "Peter and his team bring us veteran leadership."
Mountainside (NJ), USA