FINANCE

OfficeMax has down Q2; predicts tough road ahead

BY Dan Berthiaume

Naperville, Ill. – OfficeMax had a dismal second quarter of 2013, swinging to a big quarterly loss and experiencing declining total and same-store sales.

The office supply retailer reported a loss of $10 million, compared with a profit of $10.7 million in the year-ago period. Total sales dropped 4.3% to $1.53 billion, compared to $1.6 billion in the second quarter of the prior year. Same-store sales declined 3.6%. OfficeMax said the same-store sales dropped primarily due to decreased traffic and lower technology product category sales.

Based on the current environment, OfficeMax anticipates that total company sales for the third quarter and full fiscal year 2013 will be lower than the third quarter and full fiscal year 2012, including the projected unfavorable impact of foreign currency translation.

In two bright spots, OfficeMax.com reported double-digit year-over-year sales growth and the retailer said its upcoming merger with Office Depot is proceeding as planned. Ravi Saligram, president and CEO of OfficeMax, tried to stike a positive tone in his public comments.

"Sales declined in the second quarter, which impacted profitability compared to the prior year period,” said Saligram. “We continue to implement cost reduction measures to align our expenses with our revenue base and expect second-half profit performance to improve versus the first half. Further, we’re pleased to have received additional cash proceeds from our Boise investment in July, bolstering our strong balance sheet. In spite of secular challenges and an uneven economic recovery, we remain committed to restoring sales growth by evolving our business model to focus more on services, innovating new products and categories, growing our adjacencies, and building our omni-channel capabilities.”

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OPERATIONS

Amazon.com tops Temkin Web Experience Ratings

BY Dan Berthiaume

Waban, Mass. – Amazon.com was the top-ranked company across 19 industries in the 2013 Web Experience Ratings from Temkin Group. Amazon.com had a score of 77%, almost 21 percentage points higher than the retail industry average.

Other retailers in the top 10 included eBay, tied for fifth place at 70%, and QVC, tied for eighth place at 69%. Taco Bell and Kmart earned ratings that were at least 15 points below the retail industry average. Old Navy was the only retailer to have a double-digit score increase from last year.

According to Temkin Group, the ratings expose an overall poor state of web experiences. Only 6% of companies earned "strong" or "very strong" ratings, while 63% earned "weak" or "very weak" ratings. The research also shows that web experiences aren’t improving. More than half of the companies that were in the 2012 and 2013 ratings earned lower scores this year.

"The web is a key channel, but online experiences aren’t very good and are heading in the wrong direction," said Bruce Temkin, managing partner of Temkin Group.

The Temkin Web Experience Ratings are based on consumer feedback on companies with which Temkin Group survey respondents have recently interacted. Consumers are asked how much they trust those firms.

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News

Campbell makes leadership changes

BY CSA STAFF

CAMDEN, N.J. — Campbell Soup Company has appointed Ed Carolan as president of U.S. retail and Tim Hassett as SVP and GM of Away from Home and as chief customer officer of Campbell North America. Both will report to Mark Alexander, president of Campbell North America.

“Ed and Tim are outstanding leaders who have delivered strong results throughout their Campbell careers. The company will certainly benefit as they bring their experience and knowledge into their new roles, to drive growth by strengthening our core business in the U.S. and by expanding into faster-growing spaces,” said Alexander.

Carolan will assume responsibility for Campbell’s $3.5 billion U.S. soup, sauces and beverages business. Carolan joined Campbell in 2001 and has led several significant businesses. Since 2011, he has led Campbell’s core U.S. soup and simple meals business. Under Carolan’s leadership, Campbell has delivered four consecutive quarters of growth in U.S. Soup. Prior to that, Carolan served as GM of Pepperidge Farm snacks division, with responsibility for the company’s crackers and cookies business, where he is credited with accelerating growth behind Goldfish crackers. From 2006 to 2009, he was GM of Campbell’s StockPot and North America foodservice business. Prior to joining Campbell, Carolan spent five years in brand management positions at Procter & Gamble in both the U.S. and Europe. Carolan earned a bachelor’s degree in electrical engineering from the Georgia Institute of Technology and an MBA from Harvard Business School.

Hassett will assume responsibility for leading Campbell’s North America foodservice business and its retail fresh soups and sauces business, as well as expanding the availability of Campbell’s products in the immediate consumption and e-commerce channels. In addition to the away from home position, as chief customer officer of Campbell North America, Hassett will bring together sales teams to build strategic joint business plans with Campbell’s customers in a unified fashion. He joined Campbell in 2004. Most recently, Hassett served as SVP of sales for Campbell North America. Before that, he spent almost seven years at Pepperidge Farm, first as SVP of sales and then as GM of the fresh/frozen bakery business. In both roles, Hassett’s teams delivered share and earnings growth. Prior to Campbell, Hassett spent three years at Kellogg Company and earlier in his career spent 15 years with Procter & Gamble in a variety of sales and business unit roles. Hassett earned a bachelor’s degree in marketing / management from Siena College.

In addition to the leaders named today, Campbell North America innovation VP Darren Serrao has been promoted to SVP, innovation and new business development, where he will remain focused on leading innovation, commercialization and new business opportunities. Under Serrao’s leadership, Campbell has accelerated its rate of innovation. He has led the launch of several new products designed to expand into faster growing segments and appeal to new consumer groups such as millennials.

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