We are now well into 2010 but we are still in that interesting period before the year’s first results and we start to get a picture on how the retail sector fared during the holiday season.
This period is traditionally the quieter time of the year, but it is interesting to look at this month’s News round-up and compare with 12 months ago.
Pay cuts, job losses and profit dives made up much of what OPI covered last year. 52 weeks on and companies are reporting cautious optimism and upticks in their financial performances. I must say it makes a pleasant change, and long may it continue!
The office furniture sector has found the going tough recently, so it is a relief to hear that Steelcase is hopeful that it has seen out the worst of the downturn.
Imaging supplies have postively thrived during the slump and it is no sursprise that a company like Clover Technologies is in the position to purchase NER Data. It will be fascinating to follow how it uses NER’s technology to gain leverage in the market.
NER has become one of United Stationer’s most important partners in Managed Print Services, and we will be following United’s, and SP Richards’, results as they come in on opi.net in the coming weeks. Let’s hope for more good news.
Andy Braithwaite, News Editor
‘Max to announce 5-year growth plan
Naperville (IL), USA
OfficeMax is to present a new five-year growth plan in February according to a financial analyst.
In a note to clients, Citi analyst Kate McShane said that the office supplier would be announcing a five-year growth plan, most likely at its quarterly earnings call on 17 February.
McShane said that this announcement would be a "positive catalyst" for OfficeMax shares and said that Citi had added the company to its Top Picks Live! list of favourite small/mid cap shares in the hardlines retail sector.
Citi has put a $17 target on OfficeMax shares, a 24 percent increase on their 11 January price of $13.68.
McShane also said that she expected OfficeMax to continue to take costs out of its business, including further store closures, job cuts and supply chain rationalisation.
Steelcase feeling optimistic
Grand Rapids (MI), USA
Steelcase is optimistic that it has passed the low point of the downturn and reported break-even net income for the third quarter of fiscal 2010, in line with its own estimates.
The company said that in the third quarter of fiscal 2009, the company reported net income of $0.4 million. Third quarter revenue of $616.1 million represented a decline of 24.1 percent compared to $811.3 million in the prior year quarter. The company added that revenue comparisons were impacted by approximately $16 million of favourable currency translation effects compared to the prior year.
"I am pleased we experienced another quarter of sequential revenue growth," said CEO James Hackett. "While the timing of a complete industry recovery remains difficult to predict, we have seen the seasonal trend in the second and third quarters, along with stabilising day-to-day order levels and the return of modest calendar year-end business, which provide further evidence that the first quarter of this fiscal year may have represented the low water mark for Steelcase in this recession."
The company expects fourth quarter fiscal 2010 revenue to reflect a higher than normal seasonal decline compared to the third quarter and approximate $570 million. It also expects to report approximately breakeven operating income (excluding an estimated $6 million of restructuring costs) and approximately breakeven net income for the same quarter.
Clover buys NER Data
Clover Technologies Group has announced the acquisition of NER Data Products’ Imaging Supplies Division and its wholly-owned subsidiary, Image1.
Founded in 1971, and headquartered in Glassboro, New Jersey, NER is a provider of imaging solutions, managed print solutions, data centre management products and data center services. NER started Image1 in 2002 to address the printer parts and service side of the imaging industry. Most recently, NER has been working alongside United Stationers to develop managed print services (MPS) solutions for HP.
Clover, best known for its remanufactured image supplies, said the combination of NER’s supplies and printer parts business with its product and services offering will enable Clover to offer its customers the "broadest assortment of imaging products in the aftermarket industry". It will also expand Clover’s distribution capabilities and augment the company’s portfolio of MPS programmes.
"We are very excited about this acquisition. With an enhanced printer parts offering, we continue to advance our go-to market strategy. Because Clover and NER share a common ERP system and many of the same customers, we will be able to leverage our combined strengths to offer our customers the industry’s only fully-integrated solution," said Eric Martin, President of North America Sales, Clover Technologies Group.
VIP enters US market
Los Angeles (CA), USA
Virtual Imaging Products, the Canadian manufacturer and distributor of imaging supplies, has launched sales and distribution operations in the US.
US sales will operate from a new office in Los Angeles, while distribution will be handled by the company’s two distribution centres on the east and west coasts of the US/Canadian border.
President Dan Benezra says that VIP’s 10 years of business in the Canadian market will give the company a competitive edge in the US.
"Canada is so close to the US in many ways including geography, but a much smaller market, foreign, imaginative and very competitive," stated Benezra.
"In order to have success in the Canadian imaging industry, you must have quality that rivals the OEMs, great service, value your customers can put in the bank, and pricing that makes them pay attention. The rigours of the Canadian market have prepared us for the US – every cartridge is insured for quality, backed by 24-hour on-site service, VIP support is unparalleled and our pricing is 60 percent below the OEMs."
Cello wants out of BIC deal
Leading Indian writing instruments manufacturer Cello wants to back out from the agreement it signed with BIC last year which would have seen the French company take a 40 percent stake in Cello Pens.
BIC and Cello signed a definitive agreement early last year whereby BIC would acquire 40 percent of Cello Pens for around h120 million (US$170 million), with an option to up its stake to 55 percent in 2013.
Now Cello’s founders, the Rathod family, have told BIC they want out, even though BIC has paid for six out of the
seven entities involved in the acquisition, amounting to almost half of the total amount.
It is not clear why Cello wants to end the agreement, but BIC has confirmed its intention to finalise the acquisition.
Should the deal eventually fall through, BIC can expect some sort of compensation, though this will be little consolation to the French manufacturer which saw Cello as a launch pad into the Indian and other Asian markets.
Two new affiliates for Kids In Need
Dayton (OH), USA
The Kids In Need Foundation, the non-profit organisation dedicated to providing free school supplies to economically disadvantaged schoolchildren and under funded teachers, has added two new affiliates to its network of resource centres.
The new members are Crayons to Classrooms, located in Dayton (OH), and Texas-based programme, School Tools.
Kids In Need resource centres are set up the same as a retail store where any teacher would go to buy supplies for their students or classrooms. The difference is that there is no charge for any of the school supplies or teaching aides taken from the shelves.
The new additions bring the total number of affiliates in the Kids In Need National Network to 25 centres. Inclusion in the network is by invitation only and is based on a centre’s stability and efficiency, among other criteria.
Durable acquires Idealplast
German office products vendor Durable has acquired the business of desktop accessories and industrial storage bins manufacturer, Idealplast.
Durable has acquired the Idealplast business from Finnish group Ensto Ensek for an undisclosed amount. The move comes as part of a transaction which sees Ensto acquire Estonian contract manufacturer Imco, the former owner of the Idealplast brand.
Durable’s VP Marketing Horst Bubenzer told OPI that Durable has acquired Idealplast’s production tools and that products would continue to be manufactured in Estonia in the short-term before a final decision on the production location is made.
Durable is no stranger to the Idealplast business, as Durable Scandinavia has been responsible for the sales, marketing and distribution of Idealplast products in Scandinavia for some years.
While the Idealplast brand is recognised in the Nordic region, Durable will now market the range under its own brand name across the whole of Europe.
BP Group partners with sales-i
Sales intelligence software provider sales-i has announced an agreement with the Business Performance Group (BP Group) for the UK office products market.
BP Group – whose Managing Director is former Integra Sales Director Luke Chapman – will offer sales-i to existing and prospective customers across the UK.
"These are tough trading times and many independent dealers need to look closely at sales and margins and the opportunities within their business, to build on their future success," said Chapman.
"I am confident that a combination of our consultative business services at BP Group coupled with a visible sales and customer intelligence solution from sales-i will deliver a compelling return on investment for dealers of all sizes, now and in the future."
Paul Black, co-founder of sales-i, commented: "The industry has responded very well to the BP Group in a very short time and that is testament to the experience and expertise of the team behind the company, and the timeliness of the services it offers. We are delighted that Luke and the team are adding sales-i to their portfolio of services."
Christmas cheer for DSGi
European electronics retailer DSG International says that it has posted better-than-expected sales over the Christmas trading period.
Comparable sales for the group in the 12-week period to 9 January showed an 8 percent increase with DSGi claiming "good performance" across all categories and in all markets, particularly in UK electricals, Nordics, e-commerce and in Italy.
The group’s e-commerce division, which comprises dixons.co.uk and Pixmania, grew sales by 15 percent for the period, though DSGi said that conditions in the B2B sector were still soft and computing sales in the UK fell by 3 percent.
DSGi said that it still expects 2010 to be a tough year across Europe, especially in the UK, but said that it was on course to achieve savings of £50 million this year as part of its four-year £200 million cost savings plan.
SYNNEX profits up
Fremont (CA), USA
IT distributor SYNNEX continues to post impressive financial results with its latest Q4 net profit increasing by almost 15 percent.
The company posted net profit of $30.3 million for the quarter, compared to $26.4 million a year earlier. Sales were $2.2 billion, up 5.3 percent on Q4 2008. Overall, sales for the year fell marginally from $7.74 to $7.72 billion. Net income was up almost 10 percent to $92.1 million.
"These are outstanding accomplishments given the economic environmen," said CEO Kevin Murai.
Mergers & Acquisitions
Western US dealer Complete Office has acquired a fellow dealer in the state of Washington. The latest addition to the Complete fold is Spokane-based At Work Office Products, a dealership that was founded in 2002.
"This acquisition is another step towards Complete Office’s goal of furthering our distribution capabilities throughout the Western US," said Complete CEO Rick Israel. "There is a real market need for a company that offers high touch, customised service at competitive prices to both the middle and large market customers."
Since it was started in 2003, Complete Office has grown rapidly to achieve sales of around $55 million in 2009, and has been recognised by Inc. magazine as one of the Top 500 fastest growing private businesses in the US for the last two years.
Seattle (WA), USA
Independent dealer Sayes Office Supply has entered into an agreement with rival Price Office Supply to merge the two companies. The Price Office Supply sales, customer service and logistics team will transition to the merged organisation and operate under the Sayes Office Supply name.
Both companies have been involved in the Central Louisiana market since the 1970s. Sayes said the merger will solidify the company’s position as the area’s leader in office supplies.
"There has always been mutual respect between the two companies. Our combined knowledge of the office supply industry, plus our expanded geographic coverage will bring significant value to new and existing customers throughout Central Louisiana, while keeping the business local," said Kenny Sayes, President, Sayes Office Supply.
Alexandria (LA), USA