Office Depot to invest $80 million in European expansion
Office Depot announced plans this morning of an $80 million European expansion programme for the next five years. It says it will leverage its existing direct mail platform, adding new sales channels with little incremental capital investment.
The company currently operates in Europe under the Viking Office Products and Office Depot brands and sells through four main channels: direct mail, contract sales force, E-commerce and retail stores. It sees the contract sales business and E-commerce as represening ‘exciting opportunities to attract new customers and increase customer loyalty in its existing customer base’.
Specific plans include the following:
· The company launched a contract sales force in the UK in the last quarter of 2000 and now plans to expand this to Ireland and the Netherlands, in addition to four or five additional European countries over the next eighteen months.
· On the E-commerce side, it has nine International websities and at the end of May launched an Office Depot branded site in the UK for contract customers. It plans to offer contract customers Office Depot branded sites that are specifically designed to meet the needs and requirements of each contract customer and these will be offered in each contract country over the next 12 months. In addition to new contract websites, it is planning to upgrade its existing sites to offer enhaned features.
· At the end of March, 127 stores operated under the Office Depot brand name outside of the US and Canada. It is targeting retail growth in the French market. Focus will also be on new market penetration across all its sales channels.
· The company announced that it is looking for European acquisition opportunities and it remains open to potential acquisitions that would ‘allow it to build incremental sales and profits in the office products industry’.
Office Depot’s International division represents around 13% of total company sales and over 20% of profits. It is the fastest growing, most profitable segment of the business, with Europe representing the highest portion of the $1.5 billion International sales. Currently it operates in nine European countries, including the UK and Ireland, primarily under the Viking Office Products brand.
14-Jun-2001
