Guilbert France, a subsidiary of Office Depot, has informed its employees of a restructuring project that will affect a significant number of jobs.
In a French language internal memo dated 12 December that OPI+ has seen, Philippe Ferragu, managing director of Guilbert France, speaks of the "difficulties" Guilbert France has experienced "in its European markets and particularly in France in its contract activities, mail order and retail" over the last three years, and its "plunging sales" as a consequence.
In order to "safeguard its future", the company says it will undergo a restructuring project – which has been in the planning since September – that will involve a reduction in costs; the centralisation of merchandising at European level; a slight change in the location of warehouses to optimise distribution; and a reduction in the number of branches. This, says the memo, will result in the loss of 93 jobs, 71 transfers and the creation of 21 new posts.
Office Depot bought the contract stationery division of Guilbert in June 2003 for €815 million ($964 million). At present, revenues at the subsidiary are around €462 million.
The memo describes the French market as "mature" and of having "weak growth prospects, where the product offering is not very different from one supplier to the next". As a consequence, it says, "competition is very intense and pressure on pricing very strong".
It continues: "Our economic situation has strongly deteriorated since 2002 and, despite the efforts that we have undertaken, this decline has intensified since 2004. In 2005, our revenues will have gone down by 4.5 per cent and our net income by more than half. For more than a year, our sales have been plunging so that our operating charges have risen. This suggests that our position is not strong enough in this aggressive competitive environment."
To conclude, Ferragu states: "This combination of measures that we hope to implement is difficult but necessary and courageous in order to relaunch our business and prepare for our future."
Meanwhile, a report published in French publication Usine Nouvelle on Friday – which quotes Sylvie Lecomte Drecq, central officer for Guilbert/Office Depot, as a source – states that Guilbert’s 12 branches have already been reduced to five, and that the restructuring will result in 169 redundancies
While Office Depot would not confirm to OPI+ which figure was the exact one, it simply supplied a small statement to us, which read: "We continue to look for ways to improve our business model in all countries. We share those plans with the works council and with employees when they are sufficiently complete. This is an example of such a communication. We do not have any further comments to make at this time."
The company pledged in its memo to help "limit the social impact of the projected reorganisation" and help those employees affected find alternative employment.