Office Depot hit by economic downturn

Weak sales at Office Depot’s UK operations are the major cause of
decline in the company’s profits, the company said in its latest
financial release. Office Depot, which operates Viking Direct in
the UK, released its fourth-quarter results unveiling
disappointing financials. The international division, which
includes the UK’s Viking Direct business, saw fourth-quarter
sales rise 12 per cent but at the expense of margin and profits.
Operating profit for the division fell from $77 million
(£39.2 million) to $60 million (£30.5 million).
Full-year results at Office Depot saw sales rise 3 per cent, to
$15.5 billion (£7.5 billion) but earnings fall 21 per cent,
to $396 million (£199.3 million).

Meanwhile, rival office-supplies cataloguer/retailer Staples had
a bid rejected by the board of Corporate Express. The
US-headquartered Staples offered €2.5 billion (£1.89
billion) for the Netherlands-based business. In a letter it sent
Corporate Express’s CEO, Staples said a partnership would result
in “superior benefits” for Corporate Express and
eliminate risks associated with “today’s volatile business
and market environment”. The proposal was rejected
immediately by Corporate Express, which felt the sum
“significantly undervalued” the company.


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