It was interesting to note the reaction of Wall Street to Staples’ quarterly and full year results at the beginning of March.
Despite being the only one of the three power channel players to post a same-store increase and to forecast growth for 2010, and with signs of market share gains in its business division, around 12 percent was knocked off the company’s share price in two days following the release of its results.
This just shows what high expectations the market has of Staples as analysts said that the company is delivering the goods, but just not as fast as expected.
However, Staples then put its foot on the gas by announcing that it is to buy the 41 percent stake in Corporate Express Australia that it doesn’t already own for around US$400 million. It’s unclear what Staples’ ultimate goal is in Australasia, but don’t rule out an approach for leading retail chain Officeworks sometime down the line as part of a true multi-channel strategy.
Meanwhile, in the US Staples has rolled out a classy new website for its B2B offering, presenting a single source destination for a company’s business needs – from SMBs to Fortune 500 companies and government departments – under the StaplesAdvantage name.
Products and services are presented neatly in six business areas, including facility supplies and tech solutions, higher margin segments where Staples has traditionally had low market share.
The market may be somewhat stagnant at the moment, but Staples is not standing still.
Andy Braithwaite, News Editor
Staples reports positive comps
Framingham (MA), USA
Staples saw comparable sales at its North American stores increase by 3 percent in the fourth quarter as overall company sales came in ahead of expectations.
Total company sales for the fourth quarter were $6.4 billion, ahead of Wall Street average estimates of $6.3 billion. North American Retail (NAR) comps moved into positive territory for the first time in ten quarters, increasing 3 percent as total NAR sales increased 4 percent in local currency to $2.6 billion.
Staples said that the increase was due to positive customer traffic and strength in computers, ink and toner, offset by weakness in durable categories such as business machines and furniture.
For the full year, same-store sales decreased two percent and total NAR sales fell by 1 percent to $9.4 billion.
Staples’ North American Delivery (NAD) achieved sales of $2.4 billion in the fourth quarter, down 1 percent on the same quarter in 2008.
Full year NAD sales – after adjusting for 5 month’s of Corporate Express sales – were down 10 percent, while total sales were $9.6 billion, an increase of 8 percent.
International sales for the quarter decreased 6 percent in local currency to $1.4 billion, while full year sales – adjusted for the impact of Corporate Express – fell by 11 percent. Total international sales
for 2009 were $5.3 billion.
Corwell owners set up healthcare foundation
The owners of Hungarian OP wholesaler Corwell have established a healthcare foundation in support of medical treatment for children.
Robert Wittmann and George Bartucz have founded the Victoria Healthcare Foundation for Children, named after the wholesaler’s well-known private label brand which is one of the top-selling OP brands in Hungary.
A portion of the sales of most Victoria-branded products will now be donated to the foundation.
Funds raised by the foundation will be used to purchase vital medical equipment and technology to enhance the quality of medical treatment of children in Hungary.
Prior to the establishment of the foundation, Corwell recently donated a bone drill costing over h11,000 ($15,000) to the surgical unit of the Madarasz Children’s Hospital in Budapest.
The picture shows Corwell’s Managing Director, Laszlo Feher, presenting the equipment to the head of the surgical unit.
Accentra files lawsuit against ACCO
Newtown (PA), USA
Accentra, the manufacturer of the PaperPro stapler brand, has filed a patent infringement lawsuit against ACCO Brands USA.
In the lawsuit – filed on 16 February with the California Central District Court – Accentra claims that three of ACCO’s Swingline PowerEase models are in violation of two of Accentra’s patents.
Accentra is demanding a trial by jury, stating in its complaint that it "will suffer imminent and irreparable injury" unless an injunction against continued sales of the cited ACCO products is granted.
The complaint also states that ACCO’s "acts of infringement have been carried out deliberately and wilfully", leading Accentra to seek treble damages. In response to the complaint, ACCO stated: "As the world’s number one brand for stapling, we are confident in our products and our intellectual property and will defend ourselves vigorously against any allegations from Accentra."
The filing follows a similar infringement suit filed by Accentra in 2007 against Staples in relation to the sale of staplers sold under the One Touch brand. Accentra says that the suit against Staples could go to trial this year.
OfficeMax strikes deal with Food Lion
Naperville (IL), USA
OfficeMax has announced that it is to manage the office supplies category at US supermarket chain Food Lion.
‘Max will manage the category at 1,300 Delhaize-owned Food Lion stores and plans to roll out the initiative in time for the crucial back-to-school season later this year.
Merchandising chief Ryan Vero said that initiatives like store-in-store category management and making OfficeMax private brand products available to other resellers would play a big in the company’s retail expansion over the next few years as its own store openings slowed.
The office supplier is also introducing a new private label range for technology products under the brand name ENGAGE.
United creates furniture division
Deerfield (IL), USA
United Stationers has announced that it has established a separate division for its furniture wholesaling business.
The United Stationers Furniture Division will operate as a part of United Stationers Supply Co and is being headed by former SVP Merchandising, Jim Fahey, who has been named as divisional President.
The new division will have its own channel marketing and category management team, as well as a nationwide team of dedicated furniture salespeople who will be working with United’s existing Supply Division sales organisation.
The new division will continue to provide distribution through the United Supply Division’s network, with the Furniture Customer Care group based in St Louis.
United also announced that it is to be the sole US distributor of Cosco’s Bridgeport branded furniture products to resellers.
Staples moves for CE Australia
Mascot (NSW), Australia
Staples has made an offer to acquire the shares it does not already own in Corporate Express Australia.
Staples became the majority shareholder in CE Australia when it acquired Corporate Express almost two years ago.
Now it is offering A$5.60 (US$5.16) a share for the 41.4 percent of the company that it does not own, valuing the company at around A$1 billion.
The offer is worth A$5.725 a share inclusive of a shareholder dividend which is due to be paid in April.
This means that the US office products giant will be paying around US$400 million to acquire the minority stake.
CE Australia’s board has already signed an implementation agreement with Staples and unanimously recommended the offer – which represents a 25 percent premium on CE Australia’s share price of 16 March – to its shareholders.
Barring the unlikely occurrence of an unforseen better offer from a third-party or a shareholder non-acceptance, the deal is expected to proceed without any problems.
In 2009, CE Australia achieved sales of A$1.16 billion and post-tax net profit of A$57.2 million.
Office Depot has a new strategic partner in Finland.
Bruce Campbell is a $28 million business specialising in IT products and office supply services. The agreement means that Bruce Campbell will sell Office Depot private brand products and services in Finland. The agreement also signals the end of Depot’s partnership with Finnish office supplier Wulff.
Depot signed a partnership agreement with Wulff in 2004. Presumably that relationship is no longer sustainable after the two companies found themselves competing in the Swedish market following Wulff’s acquisition of Strålfors last year.
Mergers and acquisitions
Leading UK office supplies company o2o has bought the trade and assets of the business process outsourcing (BPO) division of TPF Group and the DSR Group. o2o acquired the assets for £0.7 million (US$1.1 million) after TPF and DSR went into administration earlier this month.
The assets include two leasehold properties, certain employees of the BPO business and a wide range of customer relationships and contracts recently generating approximately £20 million ($30 million) in sales per year. o2o will incorporate the division into to its AccessPlus outsourcing business as it looks to strengthen its position in business services. Norwich, UK
3M has announced that it is to acquire a majority stake in A-One, the leading office and consumer label brand in Asia.
Tokyo-based A-One is the number one office and consumer label producer in Japan and the second largest worldwide. The move signals 3M’s intent to muscle in on the global office and consumer label market after entered the category in the US with its Post-it and 3M brands in 2009. Rival Avery pulled out of the Asian OP market – with the exception of Japan – last year after failing to achieve profitable growth in the region. St Paul (MN), USA
Esselte’s previously announced acquisition of Isaberg Rapid has been completed. The acquisition of the Sweden-based stapling brand strengthens its core categories and global reach. Rapid also gives Esselte a foothold in the home improvement and professional tools sectors. "We look forward to a quick and smooth integration," said Gary Brooks, Esselte’s CEO. Stamford (CT), USA