OPERATIONS

Office Depot, Office Max select BCG for integration support

BY Staff Writer

Boca Raton, Fla. – Office Depot Inc. and OfficeMax Incorporated have selected The Boston Consulting Group (BCG) to provide integration support for the two companies’ pending merger. BCG will provide a dedicated onsite support team and work with management from both companies to establish a detailed integration plan and establish an overall vision and priorities for the merger.

“With the support of BCG, we will pursue our objectives of ensuring a smooth and productive transition, appropriately managing risks, and capturing the maximum of annual cost synergies projected to be $400-$600 million by the third year following the transaction’s close,” said Office Depot Chairman and CEO Neil Austrian.

Office Depot and OfficeMax have also established an integration management office and appointed several executives from both companies.

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FINANCE

Sears posts $279 million loss for Q1

BY Dan Berthiaume

Hoffman Estates, Ill. — Sears Holding Corp. reported a bigger-than-expected net loss of $279 million for the first quarter of fiscal 2013, compared to net income of $189 million in the first quarter of fiscal 2012. The retailer also said that it is considering selling its protection-agreement business in an ongoing effort to raise cash as it struggles to improve its profits.

Domestic same store sales fell 3.6%, which the company largely attributed to cold weather, and revenues dropped about 9% to $8.45 billion from $9.27 billion. In one positive result, the company’s online business on sears.com and kmart.com grew 20% from the same quarter a year earlier.

Eddie Lampert, Sears Holdings chairman and CEO, termed the quarter’s results “unacceptable” in comments to shareholders, but highlighted positive developments in the company’s online business and in its “Shop Your Way” membership program, as well as in emerging technology areas.

“During the quarter, we have accelerated our activity to transform Sears Holdings into a leading integrated retailer that fosters relationships with members through our Shop Your Way platform” Lampert stated. “We launched new mobile capabilities, like Member Assist, which allows our members to communicate directly with our consultative store sales staff remotely in a manner most convenient for our members. We believe that if we leverage technology to provide our members with the easiest, most seamless shopping experience possible, we will be successful."

On the company’s quarterly call with investors, Lampert said that Sears would continue to offer service agreements to customers even if it sold the business.

Sears executives also said on the call that Sears has $7 billion of liquidity or assets that can be converted to cash very quickly if needed.

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J.Shaughness says:
May-28-2013 03:31 pm

Sears Q1 results
Developing systems that will further discourage customers from visiting its stores. Now there's a great retail business plan. Their huge mistake was to fall in love with bad real estate and failed to follow their customers. Now they're stuck with big boxes nobody will want when they finally accept defeat. A textbook example of how to fail in retailing.

J.Shaughness says:
May-28-2013 03:31 pm

Developing systems that will further discourage customers from visiting its stores. Now there's a great retail business plan. Their huge mistake was to fall in love with bad real estate and failed to follow their customers. Now they're stuck with big boxes nobody will want when they finally accept defeat. A textbook example of how to fail in retailing.

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FINANCE

Foot Locker posts record net income

BY Dan Berthiaume

New York – Foot Locker reported record net income of $138 million for its first quarter, up 8% from $128 million during the same quarter a year earlier. Same store sales rose 5.2% from first quarter 2012.

In addition, Foot Locker’s total sales for the quarter ended May 4 equaled about $1.64 billion, a 4% jump from about $1.58 billion in the first quarter of the prior year.

Ken Hicks, chairman of the board and CEO of Foot Locker, credited team effort and high performance for producing the company’s best-ever quarterly profits for the second first quarter in a row.

“I am pleased to report that the thoughtful implementation of our strategic priorities continues to deliver record financial and operational results for our shareholders and other stakeholders,” said Hicks.

During the first quarter, the company opened 25 new stores, remodeled/relocated 64 stores and closed 39 stores. As of May 4, 2013, Foot Locker operated 3,321 stores in 23 countries in North America, Europe, Australia, and New Zealand. In addition, 45 franchised stores were operating in the Middle East and South Korea.

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