April 2014 Type A by OPI

Office Products International ISSUE NO.238

The word in office.

magazine

Big Interview Alan Ball, CEO of Spicers p18 April 2014

APRIL 2014

p36 United going full throttle p52 The power of coffee p66 Wellness in the office WWW.OPI.NET

Hot topic As OP companies evolve, so should their brands p26

p39 EOPA 2014 winners

p14

Roland Smithâ&#x20AC;&#x2122;s first quarterly results as Depot CEO

Contents April 2014

www.opi.net

News

6 Round-up

ECi acquired; ACI files for bankruptcy; Mercateo launches in the UK

Shows 39 EOPA Review All the winners from Amsterdam

47 Partnership Review OPI’s new-look event

8 Beyond OP

48 Ed Expo Review

Bunzl acquires again; Green Mountain changes name; VOW goes 3D

OPI visits the world’s largest educational supplies show

51 VOW+ Review

10 Analysis

TriMega’s Prime; Staples’ retail woes; resilient ADVEO; Depot/’Max integration

VOW sets its sights on the future

Category Analysis

18 Life’s a ball

52 Breakroom

Is coffee becoming too dominant?

It’s been a tough few months for UK wholesaler Spicers, but CEO Alan Ball believes the company is on the right strategic path

59 Ergonomics

New working habits provide opportunity

Regulars

Features

5 Editor’s comment

26 What’s in a name? Does rebranding your business really make a difference?

62 On the move

34 Flying the Office 1 flag

Bill Baker

63 5 minutes with...

OPI speaks to Bulgaria’s market leader

36 Breaking out

1-1 with United Stationers’ Jeff Bobroff

64 What’s on

Key dates for your calendar

66 Final word Ron Beal

“There are only very few old-style office supplies companies left. It’s essential that

companies better reflect what they do and there are many different ways of doing that”... For the full story, turn to page 26 w w w.opi.net | OPI Magazine

Editorial Editor Andy Braithwaite +33 4 32 62 71 07 andy.braithwaite@opi.net

Deputy Editor Alex Wellman +44 (0)20 7841 2942 alex.wellman@opi.net

Editor’s comment

Features Editor Heike Dieckmann +44 (0)20 7841 2950 heike.dieckmann@opi.net

Sales and Marketing VP – Continental Europe, Middle East and Africa Ewan Dickson +44 (0)20 7841 2954 ewan.dickson@opi.net

VP – North America and UK Chris Turness +44 (0)20 7841 2953 chris.turness@opi.net

Digital Manager India Pride +44 (0)20 7841 2959 india.pride@opi.net

Sales Executive Fergus Cox +44 (0)20 7841 2952 fergus.cox@opi.net

Events Events Manager Lisa Haywood +44 (0)20 7841 2945 lisa.haywood@opi.net

Production and Finance Operations Manager Nicky Coulson Designer Charlotte Gerhardt +44 (0)20 7841 2943 charlotte.gerhardt@opi.net

Production Assistant Jack Francis +44 (0)20 7841 2950 jack.francis@opi.net

Accountant Charles Edwards +44 (0)20 7841 2956 charles.edwards@opi.net

Publishers CEO Steve Hilleard +44 (0)20 7841 2940 steve.hilleard@opi.net

Director Janet Bell +44 (0)20 7841 2941 janet.bell@opi.net OPI is printed in the UK by The carrier sheet is printed on Satimat Silk paper, which is produced on pulp manufactured wood obtained from recognised responsible forests and at an FSC® certified mill. It is polywrapped in recycleable plastic that will biodegrade within six months.

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No part of this magazine may be reproduced, copied, stored in an electronic retrieval system or transmitted save with written permission or in accordance with provision of the copyright designs and patents act of 1988. Stringent efforts have been made by Office Products International to ensure accuracy. However, due principally to the fact that data cannot always be verified, it is possible that some errors or omissions may occur. Office Products International cannot accept responsibility for such errors or omissions. Office Products International accepts no responsibility for comments made by contributing authors or interviewees that may offend.

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Reality check Not that we really needed reminding of the challenges facing the office supplies industry, but Staples’ full-year results in March certainly underlined the speed of decline in traditional categories and the continuing shift to e-commerce. CEO Ron Sargent admitted that he had underestimated the declines in core office supplies and the retail challenges (see News Analysis, page 11), and Staples is accelerating its retail transformation plan by closing 225 stores and downsizing the whole North American network. This will mean the once-office supplies ‘category killer’ carrying just a range of office supply essentials, a pretty sobering thought for those still trying to sell these products into the Thank you to all those who retail channel. attended or sponsored the event As part of its for your continued support transformation beyond office supplies, Staples rebranded at the start of this year, rolling out a major marketing campaign to back up its new ‘Make More Happen’ tagline. But Staples is by no means the only company in our industry dealing with identity issues, and we take a look at the whole question of branding in this month’s Hot Topic (see page 26). We’ve talked for a number of years about the potential of the breakroom category and never has this seemed as relevant as it is today. We’ve branded this issue as a ‘Breakroom Special’ and the category features prominently throughout the pages that follow. Finally, it was a pleasure to attend the 2014 European Office Products Awards in Amsterdam at the beginning of March (see our EOPA Review starting on page 39) and to catch up with some old friends and make some new contacts. Thank you to all those who attended or sponsored the event for your continued support of OPI. We really do appreciate it. Andy Braithwaite , Editor

Tel: +44 (0)20 7841 2950 Fax: +44 (0)20 7841 2951

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News from opi.net ECi bought by Carlyle Software provider ECi has been bought out by asset management company The Carlyle Group. Terms of the acquisition were not released but it was revealed that Carlyle – which has around $200 billion in assets under management ECi CEO Ron Brooks – used equity from its middle-market investment fund to complete the deal. Carlyle said it chose ECi because of its strong reputation for software among SMBs. ECi CEO Ron Brooks said he was confident the move would help the company grow. “Carlyle is committed to investing in ECi as we support the entrepreneurial spirit and profitable growth of small and medium-sized enterprises”, he stated. “I am confident that with Carlyle, we have made the right choice for the future of our employees, our customers and our business partners.” Carlyle Operating Executive Charles Rossotti called ECi’s work a “very special asset” for the global economy while Carlyle Managing Director Steve Bailey said the deal would help the software provider grow. Bailey added: “Carlyle’s investment will enable ECi to continue investing in its great people, delivering exceptional customer service, enhancing the functionality and features of its leading solutions, and expanding its global footprint.”

Mercateo launches in UK Online trading platform Mercateo has launched its UK subsidiary. The Germany-based company has been making waves in its home country in the past couple of years with its B2B e-procurement platform and has been especially active in the office supplies channel. The UK subsidiary is Mercateo’s eighth entity outside Germany following on from its expansion into Austria, Netherlands, France, Poland, Czech Republic, Hungary and Slovakia. Overall responsibility for the UK lies with Mercateo’s co-Managing Director Peter

Lederman, but running the business on a day-to-day basis is UK Country Manager Caroline Brzezek. Mercateo said that about 250,000 items from more than 30 suppliers are already available on the mercateo.co.uk site.

AIFU adds new members

Italian office products trade association AIFU has been boosted by the addition of three new members in 2014. The association has announced that it ratified the memberships of wholesalers ADVEO and Office Distribution as well as dealer GBR Rossetto. In Ufficio CEO Adriano Alessio AIFU brought the trio into the association at its assembly meeting on 24 February when Gruppo In Ufficio CEO Adriano Alessio was reelected as President. Managing Director of Lyreco in Italy Gianluca Gibelli was also re-elected as Vice President for the association while the rest of the board of directors comprises: • Ferdinando Rese of Errebian • Michele Ambrosini of Gecal • Antonio Umbro of Office Depot • Antoni Rossetto of GBR Rossetto The appointments will run until 2016.

Office Depot hit by more overcharging claims The City of Dallas says it was overcharged up to $3.6 million by Office Depot on its former US Communities contract. A report published by the Dallas City Auditor’s office on 28 February claimed non-compliance with contract pricing and failure to offer ‘most favoured public entity’ pricing could have resulted in the city being overcharged by as much as $3.6 million between January 2006 and August 2010.

OPI Magazine | April 2014

During that period, Dallas spent over $10 million on office supplies with Office Depot under the US Communities cooperative purchasing contract which is now held by dealer group Independent Stationers. The Auditor’s report said that Office Depot had cooperated with the audit and in August 2012 had paid the city almost $125,000 in outstanding rebates. However, the report also noted that Office Depot disagreed that it had overcharged the City of Dallas on the office supplies contract. The Dallas City Manager’s Office will now consult with the city’s Attorney’s Office regarding the refund of the alleged overcharges. The Dallas audit is the latest in a long line of overcharging claims related to Office Depot’s US Communities public sector contract.

European IT and office products distributor ACI Supplies filed for bankruptcy in mid-March. According to reports in the Dutch press, ACI Supplies entered bankruptcy at its own request. Although the reasons for seeking bankruptcy were not given, it has been rumoured in the marketplace for some time that ACI Supplies (formerly known as ACI Adam) had been experiencing service issues following a switch to a new main distribution centre last year. ACI Supplies had enjoyed a meteoric rise in recent years, growing sales to over €750 million ($1.04 billion) in 2012 and expanding into several European markets, although profitability levels have come under pressure in the last couple of years, it seems. Launched in 1988, the distributor is thought to have around 4,500 customers. When contacted by OPI, ACI Supplies declined to provide a comment for this story.

GMi makes Highlands switch

US vendor GMi Companies – which includes the Ghent, VividBoard and Waddell brands – has changed its go-to-market strategy after a new channel arrangement with rep group Highlands. With a dual focus on contract furniture and office products, GMi said it was managing more than 20 different rep groups, including 13 for its OP brands, something that was complex to manage. To streamline and simplify the go-to-market strategy for office products, education and industrial dealers, GMi has chosen The Highlands Group to manage the entire channel nationwide, and the rep group will now represent all three brands in the market and assist the company with go-to-market strategy, sales and marketing. “Our strategy of evolving out of the commodity space with more differentiated products and services requires a strategic and cohesive approach,” said GMi President Janet Collins. “With The Highlands Group’s experience and full-service model, we have the best opportunity to grow our business and broaden the GMi footprint.” Speaking to OPI, Collins said the move represented “a fairly radical change” for the company, and that it had been “a very difficult and painful decision from a personal perspective” to let the other rep groups go. “As we focus more on furniture, the model Highlands was proposing made a lot of sense to us,” she stated, adding that Highlands’ willingness to let existing furniture reps handle the furniture side of things was an important factor. GMi’s contract furniture business will continue to be covered by furniture rep groups regionally. The company said it recognised the more fragmented nature of the furniture market and the loyalty to and reliance on the local contract furniture rep groups by furniture dealers.

United highlights female buyers US office supplies wholesaler United Stationers has released a white paper with information and hints for dealers wanting to attract more female customers. Called Reaching the Female Buyer, the white paper details demographic data and purchasing trends in the OP industry. According to the research, 72% of people who make orders on behalf of their office are women, and United said it wanted to ensure independent dealers were fully versed in the best ways of using this information.

Consumer Research Marketing Manager at United Owen Carr said: “While gender is not an absolute predictor of behaviour or attributes, the consideration of certain known tendencies can be a reasonable starting point for resellers to adapt selling strategies accordingly.” The research says that in B2B settings women are more receptive to consultative selling than men, while male buyers are more likely to use a product-focused purchase process. It also said that women are more likely to know the identity of their preferred office provider - placing greater emphasis than men on the overall reseller experience. Other findings include: • women are 16% more likely than men to see print catalogues as a complement to the web • women are 13% more likely to shop online than men • the majority of female buyers (64%) are over 36, while the majority of male buyers (76%) are aged 18-35 United is directing resellers to its 7 Moves to Win strategy which calls for businesses to embrace change in the market and offers help to do this.

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News n Round-up

ACI files for bankruptcy

News ■ Beyond OP

Bunzl acquires healthcare group Catering and jan/san distributor Bunzl has acquired healthcare group Lamedid Comercial e Servicos in Brazil. Bunzl said the acquisition would allow both businesses to complement each other and extend their product offerings in the country’s healthcare market. Lamedid had sales last year of R$48.3 million ($20.6 million). It is principally engaged in the supply and distribution throughout Brazil of own label medicine and healthcare consumable products to hospitals, clinics, laboratories and distributors. CEO of Bunzl Mike Roney said: “The purchase of Lamedid has significantly increased the size of our healthcare business in Brazil, having entered the healthcare sector there with the acquisition of Labor Import last year.”

Green Mountain changes name Green Mountain Coffee Roasters (GMCR) has changed its name to Keurig Green Mountain. The move is a reflection of the strength of the Keurig brand which has enjoyed phenomenal success in North America with its K-Cup single-serve coffee packs. The company’s Canadian subsidiary GMCR Canada Holding also has a new name: Keurig Canada. “Our new name better reflects who we are as a company today and captures our aspirations for the future,” said CEO Brian Kelley. “The name Keurig Green Mountain brings together our two strongest brands, Keurig and Green Mountain Coffee, into one

Hand hygiene to clean up Sales of hand hygiene products in Western Europe are predicted to reach around $680 million by 2019. Information group Frost & Sullivan said the hand hygiene market reported sales of $415.4 million in 2013 in the region, but research suggests this will grow by more than $250 million in six years. The research covers hand wash, hand disinfectant and surgical hand antisepsis products across the UK, Germany, France, Italy, Spain, Benelux and Scandinavia. Alcohol-based hand rubs are expected to become the most popular solution in the hand disinfectant and surgical hand antisepsis segments.

OPI Magazine | April 2014

single and powerful corporate identity that symbolises the strength of our business and the unity of our team, while also recognising our strong heritage.” The name change came just days before Keurig Green Mountain and Starbucks announced the two companies had agreed to amend the terms of their five-year agreement. They have agreed that altering the deal would help expand the Starbucks range of K-Cup offerings while also grow customer choice. As part of the new agreement, Starbucks is eliminating the super-premium coffee exclusivity terms, but in return would get “significantly” expanded K-Cup packs.

New Presidents for Kimberly-Clark Manufacturer Kimberly-Clark has announced a number of appointments within the company. Former President of Kimberly-Clark Professional Elane Stock has been elected as President of Kimberly-Clark International, replacing Christian Brickman. In mid-March, Kimberly-Clark announced that current President of the company’s European consumer business, Kim Underhill, has been brought in to replace Stock at the jan/san division. The appointments mean that certain company operations will now deal with new executives, including the group’s global nonwovens and sustainability, safety and continuous improvement teams which will report to Mike Hsu, President of Kimberly-Clark’s North American consumer business. The European consumer business will now report to Europe, Middle East and Africa President Gustavo Calvo Paz. CEO Thomas Falk said: “Elane, Kim, Mike and Gustavo are all strong leaders with proven strategic, operational and innovation experience. These changes will help us further build our already strong consumer and professional businesses.”

Samsung has revealed details of its cloud-based printing app that has been designed to support SMBs. Samsung Cloud Print was unveiled at CeBIT 2014 in Hanover, Germany, along with a new range of NFC-enabled printers and an enhanced security system. Developers say up to 20 printers can connect to a user’s smartphone while individual printers can be chosen by the touch of a button. The company said that other users can automatically be registered for sharing a document to print through the numbers stored in the phone. Samsung added the cloud print solution was part of the company’s focus on SMBs – which account for 61% of the entire business printing sector. It argued that the system would now allow these SMBs with fewer resources to deploy their own print management solutions.

VOW goes 3D

News ■ Beyond OP

Samsung Cloud Print app unveiled

VOW has negotiated Adrian Butler a deal to become the exclusive business supplies wholesaler for the iMakr range of 3D printers. The wholesaler promises that the partnership will give resellers high after-sales service, customer support and expertise from iMakr, a UK company dedicated to 3D printing. Around 100,000 3D printer units have been sold worldwide since their launch, with 2013 showing a 50% increase over 2012. Demand for 3D printing is projected to grow by 75% in 2014 and the sector is expected to be worth $5 billion worldwide by 2017. VOW Managing Director Adrian Butler said: “Staying ahead of the curve is not always easy, but it will be the key to success. By evolving their offering to embrace technology like 3D print, resellers have every chance of winning in the coming months and years.”

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News ■ Analysis

TriMega’s Prime gamble TriMega moves to protect direct purchase volume

dealer group TriMega is setting up a separate entity for large dealers as it looks to stem the departure rate of its biggest members. TriMega President Mike Maggio confirmed to OPI that the dealer group’s board had recently authorised the establishment of a separate LLC entity called Prime. The idea behind Prime is to create a block of larger dealers that would be able to negotiate stronger programmes with vendors – not a million miles away from the BPGI model. While TriMega is hoping that Prime will appeal to its own larger dealers, the idea is that the dealers will also remain shareholders of the TriMega group. Similarly, members of other groups could also be members of Prime without leaving their current group.

Competitive threat TriMega has come under pressure in the past few years from the Pinnacle large dealer group, with more than a dozen members switching since 2010 – and that has had a serious impact on TriMega’s direct purchase volumes, and therefore on vendor rebates. TriMega itself has called Pinnacle “a serious competitive threat” and it has been confirmed that another of its top dealers, Eaton’s, has joined Pinnacle effective 1 April. TriMega has already adjusted its fee structure this year for its

Contract Forum members, and its Dealer Supplier Collaborative (DSC) large dealer members – a group set up, ironically, by Pinnacle founder Dave Guernsey in 2005 – have seen improvements to their marketing funds payouts. Both of these steps have been taken to make TriMega more competitive with Pinnacle. Prime is still in an embryonic stage and Maggio said he would be speaking with and getting feedback

OPI Magazine | April 2014

voice should carry more weight. As has been pointed out, TriMega as it exists today was born in 2002 out of

More than a dozen large TriMega members have switched to Pinnacle since 2010 from members during the upcoming One-to-One and Pulse meetings, with a clearer picture of Prime’s model and structure expected to emerge over the next 2-3 months. However, the news of Prime has certainly sparked controversy within TriMega’s own membership, and led to the recent departure of Action Business Supplies’ John Allison from the group’s board of directors amidst accusations of the board acting solely in the interests of TriMega’s largest members. A challenge that dealer groups have faced over the years is how to adapt a ‘one size fits all’ model to cater to the evolving needs of their members, especially in a cooperative setup where larger dealers feel their

What does Independent Stationers’ Mike Gentile think of TriMega’s Prime? Check out OPI’s YouTube channel – www.youtube.com/user/OPILtd/videos – to watch an exclusive interview with Gentile.

TriMega President Mike Maggio: Getting feedback from members

a merger of two groups, one mainly comprising larger dealers and the other smaller dealers, primarily due to concerns that there wouldn’t be enough larger dealers left – due to acquisitions by the big boxes – to sustain a large dealer-only group.

Balancing act Balancing the needs of a disparate set of members has been something the group has been struggling to come to terms with ever since. There are still a number of unanswered questions about Prime, such as how it could affect current vendor programmes and what the consequences might be for smaller and medium-sized members of TriMega. Pinnacle has been cited as the main reason for these moves to create Prime, so what does Pinnacle’s founder Dave Guernsey make of the whole thing? Speaking to OPI, Guernsey said that he couldn’t go into much depth on this “sensitive issue”, but recognised that Prime was “clearly a reaction to the success of Pinnacle”. However, he did make one key point: “Pinnacle is much more than a bunch of large dealers purchasing together, so if Prime has that as its main goal – and the structure that we know of thus far appears to focus on just buy-side collaboration – then it will fall well short of what the large dealer community has been striving for.”

OP giant closing 12% of North American stores as retail woes continue

Staples

is to shutter 225 stores in North America – or about 12% of its stores there – after retail trends worsened in its fourth quarter which ended on 31 January. North American same-store retail sales fell a disappointing 7% in Q4 and, although some of this decline was weather-related, CEO Ron Sargent put the blame firmly at Staples’ door, admitting that they had “underestimated the headwinds” facing the retail channel and the demand for core office supplies. “The performance of our retail stores has consistently fallen short of our expectations over the past few years and we continue to see customer demand shifting online,” he stated during the company’s recent earnings conference call. The 225 store closures - which will take Staples’ North American retail footprint to around 1,650 outlets - will take place over the next two years and come as part of a new $500 million annualised cost-savings plan.

Remodelling the entire chain Staples will also accelerate the roll-out of its smaller format 12,000 sq ft (1,200 sq m) ‘12K’ stores. There are about 40 of these stores so far in the US, but they are retaining about 95% of the sales of their larger cousins while operating under a

Ron Sargent

much lower cost structure. Sargent said the goal was to remodel virtually the entire chain to the 12K format as leases came up for renewal.

The 1,600 new SKUs form part of Staples’ ‘beyond office supplies’ strategy and will essentially come from eight categories: facilities and breakroom supplies; maintenance, repair and operations items; an expanding mailing and shipping assortment; retail supplies for small businesses; storage solutions; gifts and cards for office parties;

“The performance of our retail stores has consistently fallen short of our expectations over the past few years” Going hand in hand with the store downsizing is a revamp of in-store merchandising, something that is likely to hit traditional OP vendors pretty hard. Staples is to eliminate about 1,200 unprofitable or declining SKUs from its retail assortment and replace them with around 1,600 new SKUs, equating to a refresh of about 20% of products. The outgoing items include some tech products such as GPS devices, digital cameras and boxed software, but the bulk of them will come from core office supplies categories. These categories will not disappear altogether, but the new-look stores will carry a range of what Sargent called “office supply essentials”.

What will the new stores carry? Copy and print remains a growing and profitable area for Staples and it has recently merged its retail and SMB copy and print sales teams to create better synergies between the online and in-store print offerings, so the copy and print service area will be a key focal point in stores. The addition of Apple hardware in 900 of Staples’ US stores at the start of the year was certainly a boost - although it came too late to help Q4 holiday sales - and this will no doubt have a positive impact in 2014. However, the agreement with Apple only includes iPads, with one analyst saying that Staples would “struggle” to compete in the digital category without the full line of Apple hardware, most notably iPhones.

organisational accessories from the Poppin brand; and early education toys and learning aids. Every store will also feature an updated Staples.com kiosk, providing customers with access to Staples’ ever-increasing online assortment.

Commitment to retail Retail has obviously suffered at the hands of e-commerce, but delivering an omnichannel experience including stores - still remains at the heart of Staples’ strategy. “I want to make it clear that we’re not getting out of the retail business - our stores are an important differentiator versus the competition,” reiterated Sargent. Staples.com performed strongly in the fourth quarter, with sales up 10% year on year thanks to the continuing shift to online and the addition of more SKUs. Staples ended the year with 500,000 items available online and plans to treble this to 1.5 million over the coming year. However, incremental sales from the expanded assortment are currently only about $4 million a week, nowhere near enough to offset declines at retail. Staples retail revamp was met with scepticism by the analyst community, with one respected analyst calling it “too little, too late” and another likening Staples’ plight to that of Sisyphus, the Greek mythological figure who was doomed to forever push a giant boulder up a hill only to watch it roll back down again. The question is now: can Staples get that boulder over the top of the hill? w w w.opi.net | OPI Magazine

News n Analysis

Staples to slash North American stores

News n Analysis

France boosts ADVEO performance 2013 was a stable year for ADVEO despite tough market conditions

strong performance from ADVEO’s French subsidiary helped the European wholesaling and distribution group achieve stable results in 2013. Boosted by the acquisition of the Buro+ dealer group early last year, ADVEO’s sales in France increased by an estimated 12% year on year to about €439 million ($607 million), or 41% of ADVEO’s total sales – making France the group’s largest market by some distance. Speaking to OPI, ADVEO CEO Millán Álvarez-Miranda recognised the contribution of Buro+, but added that France also achieved organic growth. The same cannot be said of the Spanish market, however, where strong double-digit declines led to a result that came in below expectations, although Álvarez-Miranda did point to a double-digit increase in February 2014, suggesting a more positive outlook for the rest of the year. In its other markets, ADVEO said that sales in Germany and Italy were in line with those of 2012 (although gross profit was up) and that Benelux saw improvements in the second half of the year. Overall, companywide sales for 2013 (adjusted to exclude the Unipapel manufacturing and distribution business that was recently sold) were down by just 0.3% to €1.07 billion, a positive performance given that the European market is estimated to have declined

about 8% during the year, according to ADVEO’s own figures. The result looks even more impressive when you take into account around €50 million in lower sales from EOS products. The ADVEO CEO told OPI that a good part of this EOS decline was due to the company exiting unprofitable businesses.

Return to growth “We actually generated about 10% more gross profit from EOS in 2013 than we did in 2012,” he said. “We are now comfortable with our gross margin level in this category and are looking forward to a return to growth from a stronger platform. We are very satisfied with the 2013 performance.” The improved gross profit in EOS helped offset price pressures in traditional office supplies, and full-year gross profit increased slightly to €190.3 million, while gross margin improved by 20 basis points to 17.8% of total sales. Adjusted EBITDA for 2013 was €47.1 million, 3.1% lower than in 2012, while adjusted pre-tax profit fell 9% to €22.8 million. Álvarez-Miranda pointed to a number of operational improvements during the year such as reductions in inventory levels and working capital requirements, and the generation of €30 million in operating cash flow. Debt has been reduced to x1.5 EBITDA and this is expected to be down to x1 EBITDA by the end of this year.

ADVEO 2013: Selected highlights • all countries now operating as AVDEO and as a single trading structure • closure of four distribution centres (two in Spain, one each in Germany and Italy) • €10.5 million in restructuring charges related to 274 job eliminations (the majority in Spain) planned for 2014 and 2015 • sales to mass retailers up 10%, sales to traditional stationery stores down 16% • agreement to sell Unipapel industrial division to Springwater Capital for €16 million • Unipapel division net loss of €12.1 million for FY2013

OPI Magazine | April 2014

Millán Álvarez-Miranda: Satisfied with 2013 performance 2014 is a key year in terms of developing fully integrated systems and processes across all of ADVEO’s operating companies. SAP implementation has just started in Spain and this will be followed by France shortly. With the near-term focus on this SAP rollout and on improving the performance in the Spanish market, Álvarez-Miranda said that acquisitions were not on the radar screen until at least the end of this summer, although he did not rule out looking for opportunities after that. The financial markets have certainly reacted favourably to ADVEO’s strategic direction and operating performance. In the past 20 months, ADVEO’s share price has more than doubled to over €17 and is currently up more than 15% year to date.

41%

24%

ADVEO 2013 sales mix by country ■ France ■ Benelux ■ Germany ■ Spain ■ Italy ■ Portugal

19%

News n Analysis

Smith fast-tracking on integration New Office Depot CEO focuses on the future after “disappointing” fourth quarter

THERE

was a certain level of expectation ahead of Office Depot’s first set of earnings results following the closing of its merger with OfficeMax last November. The results at the end of February also marked the first public ‘appearances’ of new Depot CEO Roland Smith and CFO Steve Hare on an analyst conference call. As it turned out, the results themselves were largely a rather confusing mix of figures (labelled as “messy” by one analyst) that didn’t provide an apples-to-apples comparison of the combined Office Depot/OfficeMax results. Perhaps that was just as well. Smith himself admitted that the operating performance in the fourth quarter had been “clearly disappointing”, with declines in all reporting divisions, but added that this wasn’t a surprise given all the uncertainty surrounding the fallout of the merger. “It’s very difficult to focus on the business when your personal future

CEO Roland Smith

Office Depot has promised to unveil a “unique selling proposition” this year is uncertain,” he said, referring to staff at both Depot and ‘Max. “And this was a major consideration for why we moved so quickly to restructure.” And move quickly he has. Organisational restructuring was

Progress update A few weeks after being made CEO, Roland Smith had selected Boca Raton as Office Depot’s headquarters location and structured his senior management setup, although a couple of key roles – most notably President North America – still needed to be filled at the time of writing. Here are some of the other highlights from the past three months: • Corporate-level headcount has been reduced by more than 35%; that’s an elimination of about 1,200 posts. • A major vendor meeting took place at the beginning of February – attended by over 400 suppliers – as Depot tries to leverage its increased purchasing power. However, purchasing synergies will be lower than previously forecast due to lower sales volumes. • The Depot legacy IT platform has been chosen, and this will be used in conjunction with selected OfficeMax applications. • A common merchandise assortment will be in place by the end of the year. • European operations are being reorganised according to a channel-based management structure versus the current country-based structure. “Streamlining the business and cost reduction” continue to be the order of the day in the International division.

OPI Magazine | April 2014

finalised at the end of February, less than four months after the transaction closed, and certainly ahead of many people’s expectations. A cascade process was used to build “ownership and commitment” from the management team, said Smith. Clearly, he wasn’t overly concerned with the soft Q4 results and, despite the speed of his integration initiatives, Q1 2014 looks like it will be equally challenging, especially with the weather-related disruptions seen in many parts of the US and Canada since the turn of the year. Smith didn’t provide specific sales guidance for the quarter or the full year, saying that trends seen in 2013 were expected to continue. Depot’s share price slipped by about 15% at one point shortly after the results were announced before recovering somewhat, as investors

were spooked by a lack of visibility on results despite merger synergies now predicted to be higher than originally forecast. These synergies (which exclude retail-related synergies) are now expected to be in excess of the previous high-end estimation of $600 million. Having said that, benefits will continue to be offset to some degree by the negative impact of lower sales, leading to a conservative estimate of a minimum of $140 million of adjusted operating profit in 2014 – about half of what some analysts had been predicting.

What will be the unique proposition? However, stabilising sales is one of his key priorities and Smith revealed that Depot would be unveiling a “unique selling proposition” during the year as it looks to differentiate itself from the competition, and would introduce “revolutionary solutions for growth”. Quite

CFO Steve Hare

News n Analysis

what these will be remains to be seen, and it will be interesting to see just how ‘unique’ or ‘revolutionary’ they prove to be. As we said in our Hot Topic in the recent December/January issue of OPI, Smith and his team have the double challenge of integrating two competitors while trying to respond to the secular issues facing our industry – and it is the results side of things that seems to be providing the biggest challenge so far.

What’s in store for retail? A key area is the merging of the two retail networks. Bain Consulting has been hired to work with Depot on its retail strategy. A plan should be in place by the end of the current quarter and implementation is set to get underway before the end of the year. Jefferies analyst Dan Binder called this process “longer than most expected”, but added that it would give management time to examine the locations, make strategic decisions and figure out how to best transfer sales from one store to a neighbouring one. However, he believes that the sales transfer rate from closed stores to existing stores will only be in the region of 15-20%. Studies have indicated that there are approximately 300 Office Depot and OfficeMax stores within two miles (3 km) of each other, suggesting that at least half of these will be closed. Actual closures are likely to be more wide-ranging than that and, with 75% of leases up for renewal in the next five years, Janney analyst David Strasser said that there was a “real transformative opportunity” for Depot on the retail side. That was a point echoed by CEO Roland Smith on the earnings conference call. “We’re going to be looking at our stores of the future […] and looking at the size of the footprint that we think makes sense going forward,” he said. “Our USP [unique selling proposition] is also going to have a big impact on the size of the store and ultimately what we will carry in the store.”

w w w.opi.net | OPI Magazine

Comment

The number of stores Radio Shack is planning to close in the US

With ECi having been acquired by private equity group Carlyle, OPI asked readers for their thoughts on what difference, if any, it could make for ECi’s customers and the dealer community in general. TJ Crayne, PTC Consulting The question is whether Carlyle is happy with ECi’s current execution or looking to get a higher rate of return. If it’s the latter, that will mean change that might be counterproductive. With management remaining the same, the key take-away is that business will continue as normal with a renewed interest in maximising return. How Carlyle chooses to maximise return will be the key. The options are fee increases, cutting costs, rolling up acquisitions to get scale benefits and pursing the elusive manufacturer advertising revenue. Also, will there be an emphasis on acquisition? This doesn’t translate into investing in the current product which is where the industry’s needs are. The fund group that Carlyle is using is its Equity Opportunity Fund which has the key focus areas of technology, consumer and retail. Given this focus, one could make the argument that this is a complementary asset for Carlyle and it will look to capitalise on ECi’s multinational market. My general perception is that this transaction is moving an asset from one management firm to another – not a strategic acquisition that would bring industry benefits. Ron Wotherspoon, independent business advisor and previous CEO of ECi Software Solutions I wouldn’t have thought it will make much of a difference, to be quite honest. It is just one group buying up from another and is just another rollover for the company. Carlyle is a damn sight bigger than the last owners, but I’m not sure if it is particularly well-known for its management of software companies and what that could mean. But as far as I am concerned, being acquired by these types of groups is something that happens quite frequently to ECi, and it has not impacted the company so far. I don’t have any fears or thrills about it.

$900

million

billion

@HeatonsOffice Very impressive use of Bic pen lids... What can you create?

@StaplesCanada What do you see?

Total beverage sales in the US in 2013

SNAP SHOT

The folks at Pentel UK decided to go old school at the recent VOW+ Partner event and give dealers a strict reminder of the importance of the pen. Dressed up as naughty schoolchildren and a stern headmistress, the team got delegates to take a spelling test – with a threat of six of the best for those who failed!

opi.net poll results Resellers, which of the following best describes your breakroom/catering category?

Established and fast growing

TWEET CHAT

The amount Japanese online retailer Rakuten paid for instant messaging service Viber

$79.6

News ■ And finally...

1,000

33%

46% Don’t sell these supplies but intend to 6% Not a category we are interested in 15%

Don’t forget to take part in the discussions on the OPI LinkedIn page

Relatively new and we plan to expand

w w w.opi.net | OPI Magazine

Big Interview | Alan Ball

Just having a ball Spicers CEO Alan Ball has had his fair share of problems recently, but – as ever – remains bullish on the wholesaler’s prospects in a tough market

by Andy Braithwaite andy.braithwaite@opi.net

IT’S

unprecedented for the same person to be the subject of an OPI Big Interview twice in the space of 18 months, but we’ve broken with tradition for this month’s interviewee, Spicers’ CEO Alan Ball. Ball’s time at Spicers has been something of a whirlwind and he can hardly be described as a shrinking violet, not afraid to challenge convention and often courting controversy with some of his initiatives. Spicers has been experiencing some serious supply issues over the last few months following the introduction of new inventory software and the switch to a new main distribution centre near Birmingham. A full-length, in-depth interview with Ball on that topic can be found on opi.net. Here, the Spicers’ CEO discusses wider strategic issues, both at the wholesaler and in the UK market in general. OPI: Better Capital has owned Spicers for just over two years. What’s your understanding of their strategy for the business? Alan Ball: Well, they certainly still see significant value in Spicers. We’ve had these short-term issues but their expectation of the value of the business hasn’t changed and they still want to see this investment through. We’ve got significant asset value still left in the business and we’ve got support from them in bringing new initiatives to market.

OPI Magazine | April 2014

So I don’t think that this strategy has changed. They are obviously disappointed in the short-term blip that we’ve had, but this was always a long game; it was never going to be a quick win. But I think everybody recognises the repayments that have been made, the investments that have been made and the support that’s been given. OPI: I think certainly many industry observers were looking at perhaps the end of this year for an exit from Better Capital. Is that still on the cards or has that been scuppered really by the recent trading conditions? AB: Yes, I would suspect so. We’ve never talked specifically about an exit date, but if there was any intimation of an exit this year then I think current trading would make that difficult. The expectation of value hasn’t changed, but the short-term trading issues will certainly mean that profits are affected. We will still be profitable and what’s important now is that we come out of this a stronger business and we then deliver on those initiatives to drive the incremental value that we know we can get to. So at some stage that [exit] decision will be made. OPI: Let’s have a look at your recent trading performance. Sales down 16% in the first half, that’s on top of the 18% decline last year. It doesn’t look too good on the top line, does it? AB: No, but if you look at our like-for-like, once you strip out the sales that we had through some of the business in the previous year – the balance of OfficeTeam and some of the HP sales that we had – it suggested in fact that we were outperforming the market in December.

“Spicers is now a much stronger business in terms of its routes to market and its ability to react to market change”

Spicers | Big Interview

So we’re comfortable where we are. We clearly know that we’ve got to recover lost sales that we’ve had in the last couple of months, but we’re confident that we can do that. But the historical sales are very much predominantly on the back of those that we walked away from – business that wasn’t profitable for us. OPI: But you can’t just continue to trade 8-10% down and say that’s in line with or ahead of the market. That’s clearly not a sustainable model, is it? AB: No, and that’s why you’ve got to come up with new initiatives and new product ranges to offset that, which is exactly what we’re doing and have been doing, but in the very short term it’s not prudent for us to focus on them. We’ve got to focus on getting the business right and then redeliver those initiatives. We’re still ploughing ahead with the paper initiative, the closed loop; that’s being launched now through the Brilliant Partners. We’re still doing the extended range of products; we’ve had some success there with some of the white goods that we’ve already started to sell through. So that programme will continue and that will offset some of the market decline as we move into other aligned industries. OPI: If you take a look back over the last two years, what would you say are the main differences that you’ve brought about at Spicers? AB: Spicers is now a much stronger business in terms of its routes to market and its ability to react to market change. It’s definitely stepped out of that sort of 1970s mentality. Its ability to change and its ability to deliver that change in a speedy way is absolutely fundamental and that has made a significant difference. I think we continue to lead the market in innovation. If you look at some of the initiatives and programmes that we’ve delivered – some of which have been successful and some not, but you’ve got to try these things – we continue to

w w w.opi.net | OPI Magazine

Big Interview | Alan Ball “We’ve put our stake in the ground by getting the exclusive partnerships with dealer groups”

lead the market and we’re now in a stronger position than we were two years ago. Two years ago we were owned by a PLC that wasn’t prepared to invest and was effectively stripping the cash out and Spicers had little future. We’ve now got a dynamic business that, as I say, continues to lead the market. OPI: The UK wholesaling channel has had profitability issues for a number of years, and you’re not alone in this. Where do you need to go as a channel to make money for your shareholders and for your investors? AB: You’ve got to look at the other sectors of the market. I mean, nobody’s having a great time of it. If you take the contract market we’ve proven that we can operate in that space, that we can bring in large contracts and that we can deliver them for dealers. We know that a lot of the contract stationers are having their own challenges, therefore we believe that part of our strategy going forward is to deliver incremental growth in that channel. It’s a channel where we had zero representation and we’ve now got double-digit millions of sales. Contract is a £1 billion ($1.6 billion) marketplace as a whole, so there’s growth there for us. OPI: This contract business is you working in partnership with dealers, is that correct? Or are you doing any larger contracts that are direct with Spicers? AB: We have a combination of the two and we’ve communicated this very explicitly with dealers. We’ve got a line in the sand, a value that we will always quote dealers to secure that contract business, and we’ve done that. We have a referrals system for dealers that aren’t able to secure individual contracts and we pay a commission on the business we get from that. Then there are certain contracts that are in excess of £1 million where no normal dealer has the ability to secure that business and we’ve gone out and we’ve won it against some of the large corporates. OPI: So your argument is that you’re not competing against your traditional dealer base, but against the Lyrecos, Office Depots and o2os of this world? AB: Yes, and if you look at those large contracts that we’ve won, all of those have been secured against one of the large nationals. OPI: There was all this talk about Ernie’s a couple of years ago and MemoEtc, rekindling that going direct debate – what’s your view?

OPI Magazine | April 2014

AB: Well, we still believe that the e-commerce channel is a significant opportunity for growth. We use Ernie’s purely for our discontinued and obsolete product range and the noise there has dissipated significantly because we’re not trading the same range that we were. We do have MemoEtc as a side but, again, the noise has gone to zero because nobody has seen an impact from it. I guess the big players that we’re supporting in this phase are the likes of Hunts over in Ireland and Shoplet and Euroffice here in the UK. We see them as taking the market forward and growing that incremental business as well. So we’re supporting businesses in the e-channel that will grow and we’ll bring new products and services to them that will facilitate that. OPI: So your direct relationship with Amazon has changed over the last few months then? AB: No, we’re still supplying Amazon direct with 5 Star. They see that as a very important brand and it has a place in the market for them. OPI: But that’s sold and fulfilled by Amazon.co.uk? AB: Correct. OPI: So you treat them as a reseller? AB: As a dealer, as a reseller, yes. OPI: Longer term, do you see the need to fundamentally change your business model? More of a hybrid wholesaler-cum-distributor-cum-contract stationer-cum-dealer group owner? You look at someone like Novexco in Canada and to some extent ADVEO in France. Would these models work in the UK? AB: We’ve put our stake in the ground by getting the exclusive partnerships with dealer groups. I look at the likes of XPD and Superstat and I think they do an incredible job with their dealers. We forged exclusive relationships with those two groups that allow us to invest in them and which, in turn, allows them to invest in their membership. So I think we’re taking account of the market dynamics and moving in a way that’s more acceptable to the market. On the contract stationer side, we’ll continue to plough that furrow because we’re taking business away from the large contract players rather than the individual dealers. OPI: I guess that with the timing of these exclusive announcements and then your supply issues you’ve had some difficult conversations with Chris Collinson and

Spicers | Big Interview

David Langdown [Managing Directors at Superstat and XPD respectively]? AB: Again, it comes back to the question of who your friends are, and that you kind of forge through this. David and Chris have been extremely supportive and they’ve passed that support through their dealers in settling them down and making sure that they understand this is a very, very short-term challenge in the grand scheme of things. Of course, they’re working with their dealers’ best interests at heart and they’re putting pressure on us – which is absolutely right – but fundamentally their decision wasn’t based on a two-month blip; it was based on historical and future opportunity. We all go through these challenges, but it’s how you get through them and how you come out the other side that makes a great partnership. I think they believe that the future direction of Spicers and where we’re going is very important to their members. OPI: You mentioned Shoplet earlier; how have they been doing? We haven’t heard too much about them in the last few months since they announced their UK launch. AB: Well, I know they’re ahead of expectations. As you know, Tony’s [Ellison – Shoplet CEO] quite a private individual – he’s not shy in coming forward when he’s got comments to make but he’s quite difficult to nail down in terms of numbers – but he’s pleased with the progress that’s been made. I think I’ve mentioned before that they’re doing an annual

rate of £5 million of sales now, which in the first year I think is a pretty credible position. They’ve started to recruit and now have a team of direct customer service people that call out to end users to secure new business, so again that investment continues and we support them with that. OPI: What does Shoplet bring that’s different for the UK market? AB: Well, its whole model is different to what most e-tailers would use. I guess the nearest I could compare it to would be somebody like a Ben Johnson [an independent dealer based in Yorkshire]. Shoplet has this definition that they believe you’ve got to engage with the customer both online and offline. They have a direct customer service team that will contact customers on a very regular basis to talk about the purchasing experience and about offers and promotions, and I think that’s what differentiates them from a lot of e-tailers. We all shop online. You don’t get a call from Amazon saying, ‘how did you enjoy your last experience and here’s a voucher’. You get an email to that effect but how many of us take advantage of that? The difference with Shoplet is they’ll pick the phone up, they’ll speak to the customer and they’ll say, ‘we’ve got a discount for you today, it’s exclusive to you. Go online and use this code’. That human interaction certainly works for them in the States and they want to replicate it over here, and it will be interesting to see how that delivers.

“The UK market needs significant consolidation, and I think anybody who’s got the balls to go out with the cash to consolidate will be winners”

OPI: What’s your take on the general state of health of the UK dealer channel? w w w.opi.net | OPI Magazine

Big Interview | Alan Ball

“I think we’ve built a great business here and I’d like to see that through and continue”

AB: We all continue to have concerns about the whole channel. Dealers still have extreme financial difficulties and we’ll continue to see consolidation. But as we’ve always said, dealers are resilient and because of their nature and because of the way that they operate they will always find ways to maintain that local relationship. So you’re not going to lose the dealer channel, but it will significantly reduce in numbers. It’s well documented that five years ago there were double the number of dealers. But are we ever going to get to a position where there are no dealers? No, we’re not. Are we going to get to a position where there are bigger, stronger dealers? Yes, I believe so. Although at the moment no-one is prepared to pay value for a business and therefore dealers’ aspirations of exit are very often not matched by the reality of the market. We’ve all heard the stories where three years ago they were all offered X and now they’re being offered Y and they don’t want to take Y. The sector is not great and therefore values are significantly reduced. You only have to look at the market cap of companies in the marketplace and you can see where the challenges are. The UK market needs significant consolidation, and I think anybody who’s got the balls to go out with the cash to consolidate will be winners. There has to be continued consolidation, without a doubt. OPI: Do you want to throw a couple of names into the hat there? AB: Well, I think if you look at the contract channel it’s well documented; Lyreco, office2office and OfficeTeam – they are all having their challenges. Two of those have got RBS involvement, and you’ve just got to look at the whole channel and the route to market and ask if it’s sustainable. And, as I say, if somebody’s got the balls to be able to pull all of that together, then there are bound to be synergies; and on the back of synergies there’s future profit opportunity. That would be healthy for the sector as well, because then it releases a whole host of sales opportunities.

OPI Magazine | April 2014

OPI: Your non-executive director has a bit of a reputation as someone who does that in the office supplies industry. AB: He has, but thankfully at the moment he’s fully occupied with Spicers, making sure that he pulls us back on track. OPI: It’s easy to be negative about the channel, but there are dealers that are growing. What is the profile of the successful dealer today? AB: One that is prepared to take risks, to invest when others are not, to look at the market differently and to offer a different level of service and just to kind of rip up the rule book. Again I’ll call out Ben Johnson as one of those. They’ve taken this whole telesales operation and they’ve re-engineered the traditional dealer by being exclusively telesales. There are a number of other dealers that have taken that model and have been extremely successful. Others have started to look at different product ranges such as FM and breakroom, and where they’ve focused on that in their local sector they’ve seen growth opportunities and seem to be doing well. Some have targeted education because the traditional educational players don’t have great service to the market. So you’ve got a number of dealers, people like Egan Reid and Office Gold, that have started to aggressively attack the schools market. Similarly, some dealers are targeting the NHS [National Health Service] because doctors now have the ability to buy direct. OPI: How about your own moves into other product categories? AB: We’re already up to 4,000 additional lines now on our extended range. We’ve still got a target of 50,000 for the next year and that hasn’t changed. For example, we’ve got 2,000 white goods – microwaves, kettles, ovens, fridges, freezers, etc – from a wholesale distributor specifically in that channel. That has given our dealers an immediate sales opportunity and we’ve started to see sales generate from that. We’re working on technology and we’ve got about 1,500 products in the technology range that we don’t carry as stock, but have available on our platform. And we’ll continue to expand FM, breakroom, industrial, etc. OPI: If you had the choice, would you be acquiring jan/san distributors and educational products distributors? Would you see these as a natural fit to the Spicers portfolio?

Big Interview | Alan Ball AB: Ideally, I would be. The difficult thing is finding the right investments at the right value, and I think what we’ve proven so far is that we can organically grow a sector. But invariably, if those types of opportunities come on the table at the right value, then clearly there’s an advantage in buying them. The likes of SP Richards and United Stationers are doing that now and I’m sure that that will continue and will eventually come across to the UK market as well. But at the moment, there’s sufficient scope and sufficient depth and breadth of product opportunity to do that organically to start with, until you really understand a sector and understand the nuances of it. Then you can make that informed decision. OPI: You mentioned tech products. Is that through your relationship with Westcoast? AB: It is yes, and others, but predominantly an extended range through Westcoast. OPI: How far does your relationship with them go? Is it two-way? AB: Yes, we’re working with them in partnership on the contract side as well. They’ve got a very healthy IT contracts business with XMA and we are working with them to secure additional contracts. OPI: How does that work? AB: They’re experts in the IT field, but they’ve got relationships that also allow them to supply office products and at the moment they’ve not got the expertise to do that. So we support them in that in the same way we do it for any dealer or reseller that wants to win contract business. That’s an aspiration of theirs and we’re quite happy to support that. OPI: Spicers and Westcoast have been mentioned as a possible business combination. Do you think that you’d be a good fit? AB: Well, certainly the synergies are there and I would say that a number of combinations would make a lot of sense. But yes, looking at anybody in that field, undoubtedly there are some synergies. I think it’s a great move for us to partner with Westcoast on the purchasing side, but also then look at how we could assist them in growing in office products as well. Whether or not there would be a coming together…; we’re not going to go out and buy Westcoast, so it would be a case of Westcoast acquiring us. It’s whether or not they see the value in doing so.

OPI Magazine | April 2014

OPI: Have any talks taken place? AB: As it happens, I had lunch with Joe [Hemani – Westcoast CEO] recently, but it was more around how we work together and how we continue on the contract side as opposed to whether or not Joe fancies a punt. But yes, I think it’s important that we maintain those relationships. We’re very close to a number of partners around the world and we’ll continue to be so because when Better Capital does look for an exit, we’d be looking at those partners to see who’d be interested in coming to the table. OPI: Your name has been mentioned in the same sentence as ‘management buy-out’. Is that something that would interest you? AB: Aspirationally, if that was an opportunity then I’d love to do that, without a doubt. We’ll wait and see at the appropriate time when our investor decides that the exit is appropriate and then we’ll see where we are. But certainly, aspirationally, that would be a great position to be in. OPI: So, where do you see yourself in two years’ time? AB: Still at Spicers in one way, shape or form. I think there’s a lot still to do so I’d like to think that we can see this through and we can continue as part of the industry. You know I think we’ve built a great business here and I’d like to see that through and continue. OPI: And if not, you’ll go and live on an island in Michigan? AB: Well, that’s a nice holiday home getaway. It was a snip at $125,000, mind you. OPI: I’ve had a few comments about a tweet you made on that purchase and the timing of it, in terms of the supply issues that have been going on. AB: The opportunity came along and it was too good to miss, to be honest. OPI: No sense that you should have perhaps kept that to yourself at that particular time? AB: That would be boring though, wouldn’t it? OPI: I don’t think anyone could accuse you of being that. AB: Good – and long may that continue.

Hot Topic | Rebranding

What’s in a name?

As their product and service propositions evolve, so should the companies behind them. OP companies are right at the core of this evolution, with rebrands at the forefront of many progressive minds

by Heike Dieckmann heike.dieckmann@opi.net

TRY

and define your life in brands. Apart from some fairly obvious choices that cover the coming-of-age part of my life – McDonald’s, Coca-Cola, Fiat, Lonely Planet and IKEA feature heavily – it’s amazing how many OP companies enter the picture (IKEA arguably being one of them, on the periphery at least as the biggest furniture retailer in the world). My early school years – spent in Germany – were dominated by Pelikan (the fountain pen to have at the time), Herlitz and Faber-Castell, for example. Now, certainly from a work perspective, it’s all about my Macbook (Apple is my cool redemption!), the Post-it note and the PaperPro, with BlackBerry having made a fleeting appearance. It’s all very subjective, of course. Fact is, however, that several of the companies mentioned have been very successful at reinventing their brands time and again in order to stay relevant (see also chart on page 27). Others haven’t fared so well. How is all this relevant specifically to office products companies? The clue lies in ‘OP’ and the fact that many resellers – and distributors/ wholesalers with them – have become much more than just ‘OP’ companies.

OPI Magazine | April 2014

Many a tagline already reflects that change, whether it’s ‘Everything for the Office’, ‘Office & Work Solutions’ or anything along those lines.

On the threshold Most recently, Staples has taken the aim to be all-encompassing to new heights with its ultimately generic and new ‘Make More Happen’ tagline.

Quite possibly, says Hans Meier-Kortwig, co-owner and Managing Director of Germany-based branding consultancy GMK Markenberatung: “My experience has been that when one of the bigger players in an industry starts to change its positioning and way of branding, it’s just the tip of the iceberg and a lot of things around

“We’re in the same position a lot of our dealers are in, which is that our current brand doesn’t reflect exactly what our value is to the marketplace” Launched as part of its big North American rebranding campaign, Staples’ is perhaps the biggest recent campaign – in OP circles at least – out there. Does it signal the start of a wave of rebrands, in light of the fact that the industry is changing dramatically?

Steve Fund

them – suppliers, customers etc – change as well over time. “Take BMW as a major premium automotive brand with their BMW i activities. The sub brand BMW i was launched in 2012, but series production only began recently and it’s beginning to change how the whole automotive industry is repositioning itself. It’s not going to happen in the next five years, but in 15 years the industry will be very different from today. “It’s like a contest that’s happening with car manufacturers selling more and more mobility solutions because that’s what customers want. Particularly people in major cities don’t have a big interest in ‘owning’ a car, but they need and want alternative solutions. It’s changing the positioning of the entire industry.”

Rebranding | Hot Topic effectively changing perceptions of Staples from an OP company to one that offers products that businesses need beyond office supplies.” And that changing of perception was very much the idea behind the campaign. It’s also clever that the company is not just relying on a short-lived, one-shot campaign, but is keeping it very much alive by constantly changing it. Adds Fund: “Our priority is to let people know that we have a lot more products than office supplies… To illustrate this, we’re changing

“When one of the bigger players in an industry starts to change its positioning and way of branding, it’s just the tip of the iceberg” to look at a little tired and that a revamp had become necessary. Kicking this off at a time when its main competitor is in the midst of a complex integration process is clever marketing, but it remains to be seen if the results of the rebrand will live up to the big-fanfare January launch. Early feedback has been positive, says Steve Fund, SVP of Global Marketing at Staples. “Customers have really embraced the new campaign. We’ve seen a nearly 50% increase in Facebook fans and social sentiment has been overwhelmingly positive. We also saw significant increases in web traffic and Google searches. Finally, our communication tracking shows that our online and traditional ads are

superstores first surfaced (notably also spawned by Staples), if only in the sense that if you – ‘you’ being the independent dealer community at the time – don’t adapt to the new status quo, the writing might be on the wall.

Live the message Gordon Christiansen, now a partner at Fremantle Consulting, has experienced first hand what a major rebrand can do (his former company RED BOX used to be called the The London Graphic Centre) and while he says that customers might not even care what the name of a company is, its message most definitely influences their buying decisions. He says: “There are only very few old-style office supplies companies left. It’s essential that companies better reflect what they do and there are many different ways of doing that,

our logo every day by replacing the ‘L’ with products that are beyond office supplies. This provides the opportunity to showcase the thousands of products that are Perhaps a sign now available, from breakroom of the tim es , Apple – a compa snacks, technology, medical ny that has changed ou r lives, not just and restaurant supplies with its products bu t also with its et to cleaning supplies and hos – has risen to the top of our Best Glob al Brands list, furniture. The intent was to giving us a new number one fo r the first time 14 disrupt how people think years [author’s in note: Coca-Cola had occupied the top spot for about Staples and get the past 13 year s]. As legions of fans can attest them talking and carry our , few brands ha ve enabled so m pe op le to any do so much so easil message forward.” y. With a reputa for revolutioni tio n sin What’s happening in g the way we w ork, play and communicate, Apple has set a the OP arena right now high bar for aesthetics, sim plicity, and ease is not completely unlike of use that all other brands ar e now expected the sea change that we saw to match. Je z Fr am pton, Global Ch in the mid 1980s when the ief Executive, Interb rand

“

Referring back to office products, he adds: “Something similar is happening in the OP industry. Business models are changing, the internet is playing a major role and the paperless office is [increasingly] here. Old models are not as valid anymore as they used to be and a lot of players are asking themselves what kind of future they’re heading for. What do they stand for, what is the main demand of customers – do they want a product or a solution?” Many would agree that Staples’ ‘That was easy’ tagline had started

2013 Best Global Brands

Source: Interbrand – www.interbrand.com

w w w.opi.net | OPI Magazine

Hot Topic | Rebranding depending on customer base, business strategy and so on.” OTTO Office’s Head of Procurement & Business Development Christian Langvad believes that the need for rebranding – if there even is a need – is very much customer-driven: “The whole notion of repositioning or rebranding yourself is a result of a change on the customer side. Customers today do not only accept, but expect to source products other than pens, and to be serviced with things other than just desktop delivery from their supplier. It’s about being an ‘office specialist’ rather than an ‘office product specialist’.”

Total buy-in required How to go about changing the overall message of the company may differ quite widely, but what everybody agrees on, says Christiansen, is that a total buy-in from all stakeholders is required. “It’s not about a logo,

its colour etc, but about changing your business strategy. It’s a very considered process and you have to look at every part of your business.” Meier-Kortwig agrees, advocating a holistic approach to any branding exercise. “It’s about more than the campaign, it’s about the entire brand experience. Take Staples’ ‘Easy’ tagline (author’s note: the rebrand has only happened in the US and Canada so far, not in its international operations). operations If you have ‘easy’ as the core message of your company, you really have to make sure that the experience is ‘easy’ for your customers at every point of contact. “Branding is more like a change management process and can only support the changes that companies have to make in any case. The more the brand is engrained in a company and its workforce, the more successful it’s likely to be. Just saying we want to be the global category leader for this and that and increase our margin by 20% won’t work. People don’t

What it says on the tin… Some rebranding exercises are big, widely-publicised campaigns – Staples’ certainly fits that bill in our industry – while others have gone about changing some core aspects of their company rather more quietly and over time. UK-based United Managed Office Services firmly falls in the latter camp, but is nevertheless a company that takes its brand responsibilities very seriously. The company has been through a somewhat evolutionary rebranding exercise over the past six years, having just kicked off the third stage. OPI spoke to Sales and Marketing Director Darren Lloyd to find out more.

Case study

OPI: Please tell me about the rebranding of the company and where it stands now. Darren Lloyd: Well, effectively United Managed Office Services has gone through two rebranding exercises and we’re currently in the process of a third ‘mini-rebrand’. The first one happened when the three independent dealer businesses that had merged – the companies were called Origin, One Stop Supplies and Hertsmere Group Services – really came together to form United and that was in 2008. At the time we dropped all the legacy names of the businesses and very quickly, almost overnight, rebranded ourselves as United. It was a reasonably painless exercise, but of course we had some legacy clients who would always think of us as one of the three businesses that we once were. For us, however, it was an essential

OPI Magazine | April 2014

get engaged with that, because it’s meaningless for them. But they would get engaged with a good idea that they can believe in.” There are a variety of companies that have successfully reinvented themselves. On the manufacturer side, Esselte Leitz has been a particularly good example of how to embrace digitisation, get on the ‘mobile curve’ while at the same time maintaining its core focus. From a dealer perspective, United Managed Office Services has set a good example of how to become an all-round business solutions provider (see also ‘What it says on the tin…’, below). One of the questions on everybody’s lips, of course, is ‘what is Office Depot going to do’? Perhaps a complete rebrand – beyond the new logo – is not at the top of the list of priorities right now and will come later when the new combined company’s strategy has evolved more. Certainly OPI didn’t manage to get any feedback on this before going to press. Looming even larger, however, is the future brand positioning of United Stationers. Even the analyst

rebrand because it moved us from being a parochial, small-time dealer to a serious business in our industry. And overall, that positioning changed people’s perception of who we were and importantly, what we could do for them. OPI: When did you change to your current name – United Managed Office Services? DL: As our go-to-market strategy evolved, we decided to change the name of the business from simply United to better reflect what we actually do and that is managing office services. That was in 2012. It’s become a real differentiator between our competitors and ourselves. The service – as opposed to merely product – offering that we now have creates a definite USP for us and that comes from repositioning ourselves from a customer as well as from a supplier perception. OPI: Looking at your website, for example, the name United still stands out much more than the overall ‘managed office services’ proposition though… DL: You’re right, and that’s basically what we’re doing now in this third stage of rebranding. We kicked this off in the middle of March and it’s all about visually repositioning ourselves. Since you mention the website, I can tell you that people will often say to me: ‘Your website looks quite sexy and it does all the things that you would want it to do.’ But for me, it’s not best in class and everything we do, including the message that we want to deliver, needs to be best in class.

Rebranding | Hot Topic

Hans Meier-Kortwig community, which hasn’t really focused much on the rebranding efforts of publicly-listed companies in OP so far, is paying attention to United Stationers, says Jefferies Managing Director Dan Binder: “United Stationers has been very successful [at diversifying] and is probably the one to change its name first. It is not a small undertaking and the product mix needs to be there to support it.”

What next for United? United remains predictably guarded on the subject, with VP of Marketing Diane Hund echoing CEO Cody Phipps’ words when saying: “We recognise that we’re in the same position a lot of our dealers are in,

which is that our current brand doesn’t reflect exactly what our value is to the marketplace. Neither the name United Stationers nor our logo are reflective of our product and service mix. “But before changing the logo or even the entire brand, you need to think about how you position yourself in the marketplace. How do we strengthen the core of what we do while at the same time focusing on the two things that we think are going to drive the most growth going forward, which is increasing our digital capabilities and diversifying

don’t have a definite time-frame yet for putting a brand face on this ‘new’ company.” What United has been doing, however, is helping its dealer partners doing that same repositioning. To that effect, it has created a service called Marketopia. Within the Marketopia programme, United helps dealers assess what their current equity is, how their value is determined and how in turn that aligns with what they are going to offer in the long term. Hund explains: “We essentially talk to dealers about all of the above and about how we can help them increase their mix to include things beyond just

“United Stationers has been very successful [at diversifying] and is probably the one to change its name first” our portfolio? We’re well down the path of this repositioning, but we

The website is an extremely important part of that. The refresh we’re working on now will ensure that the message we have for both existing and potential clients is being conveyed and delivered in a style that is meaningful, gives impact and is clearly understood. We don’t believe that some of our marketing collateral or our static website are delivering that message the best they could at the moment. We know the skill and the knowledge we have in the company and that gives us a massive USP in the marketplace, but now we need to be shouting it from the rooftops that we’re also best in class in terms of marketing all of that.

Darren Lloyd

OPI: As an Advantia dealer, United Managed Office Services has been one of the keen advocates of the Truline programme that started a couple of years ago. Has that helped you in your positioning and in your rebranding efforts? DL: Definitely. We’re not wholesale dependent and are not reliant on good old Spicers or VOW to deliver our products (and if they fail we fail). We don’t broadcast that fact to our customers, nor that we closed all of our six warehouses when we moved to the Truline model. Our revenues stand at about £14 million ($23 million) at the moment, but within Advantia we’re part of a £400 million consortium and that gives us scale. And, of course, working within the office2office partnership allows us to operate nationally from a logistical point of view. Since that partnership started, we’ve acquired some businesses in distress and now have more sales offices around the country. Through our current marketing refresh exercise we’re going through a process of determining how we can get full coverage to the UK in some key regions where we’re still very weak. We’re growing and all the growth we’ve had over the past 18 months has been organic, but there’s plenty more business out there for us.

office products. Then you have to step back and say: ‘Does my current brand capture that value?’ For a lot of dealers it doesn’t, because many have the words office products in their name.” Guernsey – formerly known as Guernsey Office Products – at the end of last year unveiled the most comprehensive rebranding initiative in its history. Hund points to Guernsey as one of the dealers it worked with that realised having the word office products does not capture the total value of what it wants to present. “We have done dozens of rebranding exercises for our dealers over the past two or three years, and of those 30-50 dealers well over half have gone to market with a new brand presence that reduces or eliminates that office products position or name. Some didn’t even have office products in their name, but maybe they had a pencil in their logo. So they took it out and moved to something that looks a little more fresh and modern.” Refreshing a company’s look and message is no mean feat. Who would have thought that McDonald’s would ever be successful in rebranding itself as a health-conscious fast food option? Some stereotypes die hard though. w w w.opi.net | OPI Magazine

Sponsored Article | HP

Qualifying round HP’s Steve Sakumoto talks exclusively to OPI about the next phase of the company’s supplies channel program in the US

LAST

year, Hewlett-Packard caused a few ripples in the industry when it required resellers in the US to become ‘authorized’ if they wanted to continue selling HP ink and toner. Now the manufacturer is taking this program a stage further by requiring these authorized resellers to meet a set of criteria that will give them ‘qualified’ status. Steve Sakumoto, VP and General Manager of HP’s US Supplies Sales Organization, Printing and Personal Systems, reveals the next phase of the program to OPI. OPI: Steve, this is the second interview with OPI in the last few months. Could you start by briefly reminding us of your recent channel changes in the US? Steve Sakumoto: When we last talked, our message was that HP has been working for the past two years now on really trying to improve the customer brand and purchasing experience in the reseller channel around HP ink and toner. What we had seen over the years was what we would describe as a broad scale – I’d even go as far as saying a rampant

was supposed to do was really just enable HP to understand who the resellers were and to identify them. That went into effect 1 November and it seems to be working fine. We do have fewer resellers than we had before – from over 15,000 to about 8,000 – but that’s still a tremendous amount of reseller coverage. Customers still have many avenues to source HP supplies and it hasn’t been a problem. OPI: That’s almost a 50% decline in the number of resellers. Surely not all of the other 50% were misrepresenting the HP brand, so why such a large drop-off? SS: Well, when we did the analysis we found that there was an extremely long tail of resellers. We had literally thousands of resellers that had less than $1,000 of annual HP sales on record.

“What we had seen over the years was […] a broad scale […] brand corruption of the HP brand and our messaging” and flagrant – brand corruption of the HP brand and our messaging. We had resellers advertising remanufactured or compatible products using pictures of HP products, using HP naming standards, etc, even to the point of detailed descriptions. Often it wasn’t until well down into the product description that the customer might finally realize that it was not an HP original. We found that this was causing a lot of customer satisfaction issues, so when we last spoke we were on the verge of launching a change in our distribution strategy from a completely open model to one that we call ‘authorized’. This would require resellers to – at a minimum – register with HP and provide some basic business information. What that

OPI Magazine | April 2014

HP | Sponsored Article We believe a lot of those were possibly not bona fide resellers: they might well have been heavy end users that had positioned themselves as resellers to buy for a discount. It just goes back to some basic business fundamentals around identifying resellers and making sure that they were actually true business resellers. What’s important is that we haven’t seen any degradation or loss of business on an aggregate business. OPI: Really? Not even on a small basis? SS: We have seen some shifting around within the channel. Remember, there are two things we did which are related but independent. One was the authorization process, and separate from that is we had eliminated our two-tier distribution model. We now have nine official Tier One distributors and we eliminated a sub-tier of distribution. What we’re seeing – and we have a lot of data to back this up – is that this sub-tier is burning off inventory which has had a short-term impact on the Tier One distributors. At the same time, we have not seen any drop-off in sell-through to end users. OPI: Did you have any hiccups in the approval process? SS: We had some hiccups where we were not able to process all of the resellers in a timely manner. We’re still working through the tail end of that backlog. OPI: So by the time this article is published, you expect to have cleared that backlog? SS: Yes, we will have either cleared the backlog or given further instructions to those still waiting. OPI: Those that are still in the pipeline, are they now unable to sell HP? SS: Yes, they are currently unable to sell HP products. So end users who formerly bought through them will have to source from other resellers. But with 8,000 of them out there, that shouldn’t be an issue. OPI: But that’s probably not much comfort for resellers that are still going through the approval process. SS: Agreed, it is probably a challenge for them.

OPI: Tell us what you’re doing now. SS: What we’re now announcing is a new program where we’re going from ‘authorized’ to ‘qualified’. So last November we went into authorized, and effective 1 November this year, we’re going to move from authorized to qualified. OPI: Is this an additional program or just taking the current program to another stage? SS: Well, it is a new program from HP, but it is strategically along the same lines of continuing to focus on improving the end-user purchasing experience. The original move from open to authorized focused around some basic business information and basic registration of a reseller as an authorized reseller. What we’re doing with qualified is we’re going to be instituting a set of business and performance requirements for resellers that they will have to be able to meet in order to become a qualified reseller. These requirements are basically aligned with our strategy to ensure that our end-user customers are getting a superior purchasing and service experience from HP and our resellers.

“We’re going to be instituting a set of business and performance requirements for resellers that they will have to be able to meet in order to become a qualified reseller”

OPI: So those resellers that have gone through the process of becoming authorized must now become qualified. Is that right? SS: Yes. We are requiring that for resellers to continue to sell HP ink and toner post 1 November of this year, they must be a qualified reseller. That will require resellers w w w.opi.net | OPI Magazine

Sponsored Article | HP wanting to continue to sell HP supplies to meet certain business performance criteria that we believe will greatly enhance the customer purchasing experience. OPI: What are the criteria? SS: The criteria will include things such as a minimum sales volume, customer service, delivery mechanisms and a fully functioning website. Resellers will also have to have a physical address where they conduct primary business operations; they must appropriately use HP’s brand, trademarks, marketing materials and marketing messages; and they must be in good standing with HP. OPI: Why a minimum spend? SS: Well, the minimum spend will be fairly low – $15,000 of purchases of ink and toner from HP over a six-month period. We simply believe that if resellers are not doing at least $15,000 every six months, they will not have the sufficient business scale to properly support and present the HP brand experience. OPI: All this sounds like you have to go through another round of approval processing. How do you plan on ensuring that the additional volume of work gets completed in time for the 1 November deadline? SS: It will mean additional work for HP. We do not believe it’s additional work for the resellers because the resellers will either have met these qualifications already or they will quickly realize that they do not have the

OPI Magazine | April 2014

appropriate scale or resources to qualify for the program. Because we’re pre-announcing this, we’re giving the industry – as well as ourselves internally – a lot of time to prepare. A full year will have passed for the industry to have adjusted to the authorized program; then from 1 November we’re going to move to the next phase of progress. OPI: Is 1 November a hard deadline? What happens to resellers that haven’t qualified by then? SS: Some HP partners have been automatically accepted into the HP Qualified Supplies Partner Program because they already meet the program criteria. There is no action needed from these partners. The remaining resellers with an active US Partner Agreement will be conditionally accepted into the program to allow them six months to meet the criteria. HP will use the period from 1 April to 30 September to verify compliance, and resellers will be notified before 1 November of their status. The same for new resellers – they can apply at any time and they will be given six months to qualify. OPI: How do you think the reseller community will react to having to jump through another set of hoops to become qualified? They’ll probably be wondering what’s in store for them in 2015. SS: I can’t speak for the reseller community, but I do know that those resellers who are currently able to deliver the appropriate HP customer experience are going to be delighted with this program because they are the ones that have invested on many levels to build a business where they can deliver that

“Resellers will either have met these qualifications already or they will quickly realize that they do not have the appropriate scale or resources to qualify for the program”

HP | Sponsored Article quality experience to our joint HP end-user customers. Those resellers will feel very good that HP is actually recognizing them with the qualified status and allowing them to be differentiated from a broader group of registered resellers. OPI: How will you measure whether this program has been a success for HP? SS: Longer term I think the ultimate measurement will be a dramatic reduction in the number of customer complaints – in areas such as product expectations, the purchasing and delivery experience, after-sales service – which we receive directly or hear about through our reseller partners. OPI: And how will that work in practice? SS: We will have a tiered system that evaluates resellers based on some performance metrics that we’re still working through, and then our funding program will be scaled to those tiers. Basically, this will mean that resellers that are doing more for HP – those that provide a superior brand experience and most appropriately present HP products – will get more funding on behalf of HP. That will be rolled out in the second half of this year. OPI: There will obviously be some resellers that can’t qualify. Will you give them any form of assistance or a grace period to meet all the criteria? SS: The program is not intended to exclude anyone. It will be the resellers’ own choice if they want to service HP customers appropriately, and they’ll then have to decide if they are prepared to make the necessary business investments or if they feel that they can get a better return with their assets doing other things. OPI: This qualified program is just for the US market. Are there any plans to do something similar elsewhere? SS: As I said last time, the other country management teams are constantly evaluating what we do in the US and it’s really going to be up to them, based on their business conditions or customer set, whether they do something like this or not. OPI: Are you aware of anyone thinking about replicating the authorized model? SS: Not at the moment. But I know countries in Europe like the UK and Germany are looking closely at what we’re doing. OPI: There must be ways around this and I’m sure some savvy dealers will

find ways of procuring HP inventory from elsewhere. SS: Of course, there are always opportunities for gray marketing, sideways selling, etc. These are all against our distribution policies and resellers that participate in these types of activities will be disqualified from our program. OPI: How will you police that? SS: We have a team of folks that are in charge of what we call channel compliance, and their job is to constantly monitor activities online, activities that get reported to us directly from channel partners or things that our sales organization observes directly. This team is responsible for identifying a potential violation, obtaining the documentation that proves whether a violation occurred or not and then taking appropriate action. OPI: Are your distributor partners aware of this and, if so, what’s their reaction? SS: By the time this article goes to press, we will have communicated these changes to all the Tier One distributors. OPI: When we spoke previously you anticipated that at some point you would develop a Preferred Partner Program. Is the qualified program another name for that or is this something different? SS: This is slightly different. The move from authorized to qualified will put in place a set of business and performance requirements which we believe will deliver some minimum service, support and presentation capabilities within a certain set of resellers. We are still moving forward with our Preferred Partner Program, but it will be an invitation-only program for resellers that have met the qualified status but go far beyond that and really deliver a superlative experience. We will be inviting an elite group of resellers to join us and we will refer to them as Preferred Partners. OPI: Do you have any sense of how many Preferred Partners you will have? SS: No, we haven’t finalized that yet. It’s going to be a fairly small number to start with and it will be reserved for those partners that we know unequivocally would deliver what I call a superb customer experience.

“The program is not intended to exclude anyone. It will be the resellers’ own choice if they want to service HP customers appropriately”

w w w.opi.net | OPI Magazine

Dealer Spotlight | Office 1 Bulgaria

Flying the Office 1 flag

Becoming market leader in Bulgaria has been considerably easier for Office 1 than maintaining that position in often very challenging circumstances by Heike Dieckmann heike.dieckmann@opi.net

STARTING

out from being one of the first franchising markets for Office 1 Superstores International, Bulgaria has not only been a resounding success story, the capital Sofia in 2007 also became the seat of the European headquarters for its globetrotting US-based parent. Winding back another decade, it all started in 1997 when local player Panda Cooperation signed a franchise agreement with Office 1 and became its master franchisee for Bulgaria. The first 1,000 sq m (10,000 sq ft) store opened in 1998 in Sofia. The concept quickly took off and gained scale so that only a few months later, the first sub-franchising agreement with another local player was signed. The rest, as they say, is history. By 2001, Office 1 operated 70 stores across Bulgaria, offering full nationwide coverage not only from the major cities but also from less urban areas; by 2008, this store count had increased to 170.

Downsizing Unfortunately, that growth trajectory didn’t last, first prompted and then exacerbated by the economic meltdown that began in 2008. Raicho Raichev, owner and Chairman of master franchisee Panda Coop, says: “In order to survive in the times of the severe financial crisis and, on top of that, retain our leadership position in the market, it was necessary for us to take drastic action in terms of reducing cost and improving profitability. It became vital to carefully downsize our activities and our stores network. “We have now retrenched to 100 stores, 80% of which are owned by sub-franchisees and

OPI Magazine | April 2014

20% by Panda. In terms of staff, we have 1,000 employees – 400 of them Panda staff, with the rest being employed by the sub-franchisees. Resizing the company has meant that we could increase our revenues in 2013 compared to 2012. Most importantly, however, we have managed to increase our net profit by 86%.” It’s not just the economy, however, that has changed the landscape for Office 1 Bulgaria over the past 16 years, adds Raichev. “The market has become much more competitive. In addition, our customers have really changed their model and behaviour – they have become more demanding, price-oriented and much less loyal. This has been challenging for us because our goal is not to simply to do business as usual, but to justify our leadership position in the market with quality and innovative solutions, and customer-oriented initiatives.” Product portfolios too have seen changes that are broadly in line with what much of the OP community is witnessing, with breakroom, jan/san, technology and office furniture all high up on the growth and good-potential agenda. Having started in 1998 as a chain selling stationery and consumables, Office 1 stores in Bulgaria today centre no longer solely around products, but offer more and more services and solutions. From print management programmes, insurance offers and advertising materials, to business centre and telecommunication services, all of these are now part and parcel of the company’s overall portfolio. What hasn’t changed substantially is Office 1’s customer base, predominantly made up of SMEs, especially as far as its retail stores are concerned. As the only chain store operator covering the entire country, with the competition largely consisting of local stationers, Raichev says it is important

“It was necessary for us to take drastic action in terms of reducing cost and improving profitability”

Office 1 Bulgaria Founded: 1997 Headquarters: Sofia, Bulgaria Owner/Chairman Panda Coop: Raicho Raichev Sales: €27 million ($38 million) Staff: 1,000 (incl. 400 Panda Coop employees) Business model: Retail, e-commerce – B2B and B2C

Office 1 Bulgaria | Dealer Spotlight for both the individual and the small B2B customer to have a conveniently located Office 1 store nearby. But as the company’s focus on the B2B segment has increased considerably over the years, so has its target customer range here. Says Raichev: “We service many large private companies at a national level and we have also set up a department that specialises in dealing with government contracts. This segment is becoming more and more important for us. “One of the achievements we are very proud of is our cooperative agreement with the national education system. We have for example created a specialised catalogue for schools and kindergartens named The Contemporary School. This contains not only educational materials but also sports equipment branded Office 1 Superstore Sports. It’s a fairly new but very promising product category in our portfolio.” Office 1’s own brand range now incorporates approximately 1,000 SKUs,

Bulgarian team here works very closely with the Office 1 European HQ staff, especially as regards developing our web store front and initiating and pushing through our marketing activities. They have built up a strong knowledge base in this channel over the years and are a great help with our online business.”

Technology investments The Bulgarian business, led by Panda Coop, has also been at the forefront of other technology issues, often being first to market with new solutions, as Raichev points out: “Our web-based corporate customer order control and management system has been the first of its kind in our industry in Bulgaria and it has saved us time, effort and financial resources. It enables us to precisely monitor and control the costs and processes related to the purchasing needs of our customers, at the same time being in accordance with their management structure and confidentiality requirements. It uses various access levels

Raicho Raichev

“The task is to work on further developing our e-commerce sales channel and consolidating this with all other channels we use” manufactured both in Europe and Asia. These products not only serve the local market but, stocked in the company’s warehouse in Sofia which also serves as a central logistics hub for the cross-border operations of Office 1 Superstores International, are distributed along with other brands and goods to Office 1 master franchisees and dealers worldwide. Part of the own brand range is Office 1’s office furniture portfolio that it manufacturers itself and which includes chairs, archiving systems, presentation hall solutions, cafeteria and restaurant equipment. The production facility for office furniture is located in the city of Sliven and, says Raichev, “makes us flexible in terms of manufacturing lead times and confident in terms of quality control”.

International outlook It is this international outlook, combined with the financial backing of a sizeable and strong ‘parent’ that has contributed to Office 1’s sophisticated logistics operation, its technology-savvy approach and its full-on foray into e-commerce. While in some countries perhaps its web offering hasn’t taken off as much as the company would have liked, e-commerce now accounts for 30% of overall sales and has become an important part of Office 1 Bulgaria. Says Raichev: “E-commerce has become a very important channel for us and our

and authorisations, sets up buying limit controls, determines ordering cycles and payment terms, and provides multiple reports available both to our sales teams and the customers themselves.” Going forward, a true multichannel approach is what ultimately lies ahead for Office 1 Bulgaria, but in the meantime Raichev is happy with the company’s performance in often tough circumstances. He concludes: “We have been resilient in facing the challenges provoked by the dire global economic landscape as well as the particularly difficult national situation over the past few years, but we now have a profitable and stable business. “Maintaining and developing this position will involve a huge amount of work and require a continuous focus on the most basic things in business – efficiency and profitability. The task is to work on further developing our e-commerce sales channel and consolidating this with all other channels we use.”

Office 1 flagship store in Sofia

w w w.opi.net | OPI Magazine

Special Feature | Breakroom

by Heike Dieckmann heike.dieckmann@opi.net

one of its fastest-growing product segments, just over a year ago breakroom was removed from United Stationers’ Lagasse business and became a unique category under the company’s Supply division, alongside categories such as office supplies, technology and office furniture. At the same time, Jeff Bobroff was appointed Director of Category Management, Breakroom, tasked with bringing a stronger focus to the category and setting its strategic direction. One of the first tangible results of Bobroff’s work has been the recent launch of a catalogue purely dedicated to breakroom. OPI: First up, please tell me about the new breakroom catalogue. Jeff Bobroff: Sure. The catalogue is really a very good representation of how we have evolved in the category and how we hope our dealers will evolve. It’s a sizeable publication – over 100 pages – and it looks like what we call a ‘magalogue’,

OPI talks to Jeff Bobroff about United Stationers’ focus on breakroom and how there is plenty more market share to be won in the category ‘Everything for the Workplace’ catalogue, so in total we now have about 1,000 SKUs. OPI: What makes up these extra products? JB: We enhanced our offering in a couple of areas, including snacks and cold beverages. We had a very limited assortment of cold beverages in the past, but really bolstered our offering here with soda, juices, sparkling water and flavoured waters, and a wider selection of energy drinks.

Breakroom is a $4 billion category equipment, but

OPI: There’s always plenty of talk about coffee – how important is it to you (see also our Breakroom Category Analysis on page 52 )? JB: We have a saying and that is ‘win coffee and win the breakroom’. Industry statistics say coffee is 70% of the category so it’s incredibly important that we have not only a great selection of coffee – our offering

“Dealers have huge advantages in terms of service and the breadth of products they offer” a cross between a magazine and a catalogue. It’s different from any of the catalogues that we’ve done in the past and includes a combination of educational information and plenty of lifestyle imagery. OPI: How many products are in your breakroom assortment now? JB: We added about 300 new products to what we had in our 2013

OPI Magazine | April 2014

has been pretty decent for a while – but that we have a coffee offering in the marketplace which allows our customers to be successful. We recently launched a programme called Perks in the dealer community. The brewer is a key component of winning coffee and Perks aims to remove the obstacles that our dealers might have. These include the capital risk around buying and hiring brewer

also everything to do with installation and service. There are certain brewer models we stock and others that we make available through our third party partner BUNN. Essentially, dealers are working with United and BUNN on the installation and service aspects of brewers as well as the training and support, in exchange for increasing their breakroom purchases with us. With this cooperation they also feel more confident that, if they win an account, they are able to do everything they need to do to keep the customer happy. OPI: What other issues are there that dealers wishing to sell that category need to be aware of? JB: As with everything new, there’s always an educational and a confidence component. Most of our dealers are accustomed to selling certain types of products, but when you get into food and drink and issues like expiry dates, the different types of coffee roasts, pods

Breakroom | Special Feature and cups and then of course packaging quantities, there’s a learning curve. OPI: Is it a steep learning curve? JB: It depends. People know what a Doritos chip is and they either like it or they don’t. Like I said, there are a couple of spots where dealers have to educate themselves and feel comfortable with what they’re selling, but most of the products in the breakroom category are for everyday general use, so for the most part it isn’t a huge learning curve. OPI: Where do the biggest opportunities lie for dealers? JB: Dealers have huge advantages in terms of service and the breadth of products they offer. Quite often the end user is serviced by those dealers several times a week, so there is a big relationship advantage as well. OPI: Who is your sweet spot dealer in breakroom? JB: There’s an enormous opportunity with our existing customers, both in terms of these dealers penetrating their end users as well as getting a bigger share of wallet for those that are a little more established in the category already. Before breakroom became a unique category for United last year we were mostly reactive to the marketplace and definitely had a bit of catching up to do. We believe we did that successfully in the last year, particularly with our existing customer base. With further investment and creating value in the category, we will hopefully also gain additional customers in the breakroom space, but for now it’s really about helping our dealers in terms of their evolution and sophistication in the category. If they currently sell Folgers coffee,

creamers and sugars, look to them to sell snacks and appliances. If maybe they sell K-Cups but don’t have an offering for traditional brew, let’s help them get that full offering.

offering, both in terms of categories that we provide today where we continue to add options for our dealers, as well as products – like chocolate – that are non-traditional

“The category is still growing and that growth is very sustainable” OPI: What has been the feedback from your dealers with regards to your more concerted focus in breakroom? JB: It’s been very positive. We’ve had a good response to our training programmes and also some very positive feedback to the Perks programme I mentioned. So I think the dealer community is pleased with the direction we’re going in and we’re trying to lead them as best as we can to help them grow. OPI: So what now? Are there, for example, any products that you think could be further explored that you’re not stocking at the moment for whatever reason? JB: Good question. Economically, drop-shipping liquids is a bit of a challenge because of the ratio between the line value and the weight. If you have a 24-pack of water and it’s a $5 item, when you drop-ship that item with your packaging it adds cost. But that’s a challenge for the whole channel and is similar to what’s happening with copy paper – heavy item, low value. Something else that is an opportunity as well as a challenge relates to products requiring temperature control and which conventionally don’t fit into our current distribution model. There are opportunities for us to round off Jeff Bobroff our service

because they require temperature control.

Bre is proakroom grow jected to at a 3.5%bout

OPI: Much has been said about the fantastic opportunities of breakroom for the OP community. Are we anywhere near reaching maturity or is the current growth sustainable? JB: The category is still growing and that growth is very sustainable. According to industry sources, breakroom overall is a $4 billion category, projected to grow at about 3.5%. That’s not a huge growth, but if you look at the OP channel, it only owns about 14% of that market. Like I said before, OP players have a superior service proposition and a convenience factor that allows them to leverage their current relationship, their current product breadth and everything that they’re already doing for that customer. So they really have an opportunity to take share. It’s not a discussion about ‘here’s my price on this item’. Instead, it’s about: ‘Hey, you’re already buying your office products from me; I want to sell you all the business products you want in your office and breakroom is a big part of that. If you’re sending somebody to a warehouse club or you have an office coffee service dealer coming here, you don’t need either of them. We can provide you with the products and the service that you need.’ It’s really about OP dealers embracing this category, getting comfortable with it and selling their overall value proposition. w w w.opi.net | OPI Magazine

EOPA 2014 | Show Review

EOPA 2014 The EOPA may have moved from their traditional slot at Paperworld, but that didn’t stop a highquality turnout in Amsterdam at the beginning of March

THE

European Office Products Awards (EOPA) had become something of an institution at Paperworld over the past decade, and the evening was undoubtedly the main networking opportunity for office supplies executives braving the icy climes of Frankfurt, Germany, at the end of January. Following a decision to take a year out from the awards while we reviewed the format, OPI was overwhelmed with requests to maintain the event, and so the decision was taken to hold the awards presentation dinner to coincide with OPI’s own inaugural Partnership event (see Partnership review, page 49) in Amsterdam on 5 March. And what a wise move that turned out to be. With about 90 senior-level executives already in situ at the splendid Okura hotel for Partnership, around 80 further attendees made the short trip for the EOPA dinner to one of the easiest European cities to fly into, although a good number even drove there. While admittedly a smaller attendance than in prior years, it was certainly an exclusive and influential crowd.

Coming just a few days after the Oscars ceremony and Ellen DeGeneres’ now infamous Samsung-sponsored ‘selfie’, it was only fitting for our host John Simonett to attempt a giant EOPA selfie (see above) which we are pretty sure is the most retweeted selfie ever from a European Office Products Awards presentation! These are not OPI awards, of course. To ensure the EOPA are impartial and credible, the winners of the awards are chosen by a panel of independent judges from across Europe. This year, the judging procedure was conducted entirely online, which allowed for the expansion of the panel to 28 industry executives representing all industry sectors. Highlights of the evening included the Industry Toast presented by last year’s Industry Achievement winner, Marcel Ringeard of Pilot. Ringeard reflected on the changes he has seen in more than 40 years in the industry and called on channel players to once again display their powers of adaptability in the fast-evolving marketplace. The ceremony came to a close with the presentation of this year’s Industry Achievement award to a visibly emotional Jamie Fellowes. Read on to discover more about this deserved recognition and for details about the night’s other winners. w w w.opi.net | OPI Magazine

Show Review | EOPA 2014

FM Product of the Year Smart Wall Paint, Dry Erase Whiteboard Paint

Smart Wall Paint’s Steven Wall collects the award from ADVEO CEO Millán Álvarez-Miranda

Facilities Management (FM) is certainly an area of interest for many in the industry, as resellers report more growth in the FM category than in any other. It was no surprise, therefore, that this award attracted a strong shortlist of contenders, but the winner – a young Irish company called Smart Wall Paint – did create something of a surprise by scooping the night’s first award, beating a number of global household names in the process. The product was something a bit different and it caught the judges’ imagination. Dry Erase Whiteboard Paint is exactly that – paint that is applied to any smooth surface, such as a wall, transforming it into a write-on, wipe-off whiteboard surface. The product is already being sold by a number of office products resellers into offices and schools, creating unlimited whiteboard surfaces for brainstorming and collaboration, and also maximising teaching space. All in all, this is a great – indeed ‘smart’ – new product for our sector and proves that innovation is alive and kicking.

Technology Product of the Year HP, HP Ofﬁcejet Pro-X series As with FM, technology products have become a key focus for many office products resellers and some smart innovations made this a hotly contested category. The shortlist represented products that have demonstrated commercial success along with strong consumer loyalty over the past year, and pitted some well-known tech heavyweights against more traditional office supplies vendors that are increasingly developing more technology-driven products. However, it was HP that came out on top this year with its Officejet Pro-X series, a lightning-fast range of inkjet printers offering laser speed, inkjet photo quality and extremely low running costs. The first range of HP printers to feature HP’s new page-wide printhead, the Officejet Pro-X series has consistently scored remarkably high ratings from print experts in dozens of online reviews. Customers also appear to love it according to the sales results shared by some of our reseller judges. A wonderful development in the print space and well-deserved congratulations go to HP.

OPI Magazine | April 2014

HP’s Rob Idink receives his firm’s award from Corwell’s László Fehér

Show Review | EOPA 2014

Traditional Product of the Year Newell Rubbermaid, DYMO LabelManager Wireless PnP In all the Product of the Year categories, the judges are looking for proven success in the marketplace. While traditional products may be lacking the growth of some other categories, it still represents the roots of the industry and the products on the shortlist this year were outstanding examples of sales excellence and innovation. This was a very closely contested category and the judges commended the runners-up – especially 3M with its Scotch Expressive tape dispensers and BIC for its Cristal Stylus. Both of these products scored very highly, but in the end Newell Rubbermaid took home the award, winning by the narrowest of margins. The judges loved the Wireless DYMO LabelManager for its easy-to-use features – including the built-in wifi – making it easy to share in the office. And with a large range of tape consumables to go with it, this product is also a favourite among resellers.

Georg Wolf from Amazon presents Kerry Murfin with Newell Rubbermaid’s award

Marketing Initiative 3M, Post-it Brand – ‘Ideas that Stick’ 2013 campaign

3M’s Maurizio Beolchi collects the award from PBS Holding’s Richard Scharmann

OPI Magazine | April 2014

To win this category, which is open to both resellers and manufacturers, applicants had to demonstrate, above all else, financial results arising from a successful marketing initiative. The shortlisted entries all met that criteria and represented a broad spectrum of campaigns engaging different target audiences. Once again, the team at 3M used innovative marketing to grow Post-it Brand’s market share and, indeed, helped to turn a declining category into one which experienced year-on-year growth. The fun campaign had it all – social media, sampling, extensive PR, and even a black London taxi. The initiative managed to reach a remarkable 33 million people in the UK – that’s over half the population – delivering a sales lift of 38% for the Super Sticky range. All in all, a memorable campaign which truly deserved this award.

EOPA 2014 | Show Review

Dealer Group of the Year Advantia Business Solutions The judges were looking for a dynamic dealer group that meets the needs of its members by providing a comprehensive package of products, resources and services, with pioneering initiatives to give its dealers a competitive edge in a challenging market. The shortlist saw three leading dealer groups in the UK – Advantia, Integra and Nemo – facing off against two of their European counterparts – and former EOPA winners – Quantore and Soennecken. The judges were impressed not only with the achievements of Advantia, but also with the number of high quality nominations that were submitted from its members – a real sign of a successful and engaged dealer group. Advantia took a risk with its Truline/office2office partnership and it appears to be paying off – at least according to the members who sent in nominations. The group has been able to demonstrate meaningful financial improvements for its members in what is a challenging and competitive environment.

Sponsored by Advantia’s Steve Keen delightfully thanks HSM’s Karlheinz Haigis for presenting the award

Professional of the Year Christian Langvad, Director – Purchasing/Merchandising, Business Development, OTTO Ofﬁce

Sponsored by

Christian Langvad accepts his award from Bjarne Mindested of Bi-silque

This important award seeks to recognise a rising star in our industry who has the potential to make a real difference to the office products community. The future prosperity and survival of this industry depends on the drive and innovation of professionals in our space and we are fortunate to have some worthy contenders. Presenting this year’s award, and a former Professional of the Year himself, Bi-silque’s Bjarne Mindested said that it was “a real pleasure” to recognise the achievements of OTTO Office’s Christian Langvad, describing his fellow Dane as “a true professional, a clear strategic thinker, a win-win person who goes for long-term relationships and achieves great results”. Collecting the award, Langvad said he was “deeply touched and incredibly proud” to be named Professional of the Year, adding that he was also proud of his team at OTTO Office and proud to be part of the office products industry. w w w.opi.net | OPI Magazine

Show Review | EOPA 2014

Wholesaler/Distributor of the Year VOW Being a wholesaler/distributor can be a tough job. As an essential middleman in the industry, life is all about juggling and balancing: brand vs private label; breadth of range balanced with controlling cash tied up in stock; managing margin to ensure profits for reinvestment while also helping reseller customers remain competitive and profitable. And the list goes on. The six wholesalers on this year’s shortlist have all excelled in these areas despite the tough economic environment, but the judges opted for VOW and it’s the second year in a row that the UK-based wholesaler has been chosen for this award. The award supports the changes VOW has undertaken as it continues to improve its business, pay down debt and extend its core product offering. The judges were impressed with the way VOW continues to identify and provide new, groundbreaking services and solutions for its dealer customers and the consequent impressive growth, which goes against the market trend in the UK. Pretty inspiring stuff from a business which was close to bankruptcy just a few years ago.

Sponsored by Lee Mellor from Newell Rubbermaid presents VOW’s Nigel Mitchell with the trophy

Vendor of the Year Fellowes The vendors that made up this year’s shortlist all had success stories to tell and were able to demonstrate impressive results and excellent relationships with their customers. However, it was Fellowes that most impressed the judging panel of resellers this year. Indeed, it has won plaudits over the past few years, proving that being open, honest and fair with customers will eventually produce a positive outcome, even under the most difficult of circumstances (see opi.net for details of Fellowes’ issues with its former joint venture partner in China). Despite those recent challenges, Fellowes has invested extensively in innovation, releasing many new products that were backed up with successful pan-European marketing campaigns. This 97-year-old company never deviates from its strong core values, but at the same time is evolving, winning and growing in a marketplace that is more dynamic and challenging than ever before.

OPI Magazine | April 2014

On behalf of his European team, Jamie Fellowes accepts the award from Lyreco CEO Steve Law

EOPA 2014 | Show Review

Reseller of the Year Amazon

Sponsored by Georg Wolf of Amazon accepts the award from Pilot’s Hugues Chatelain

The Reseller of the Year award seeks to recognise resellers with a strong presence in their respective markets – size isn’t necessarily everything, but impact is. This is tough to judge, as no two markets are the same, but all those on the shortlist stood out for excelling in their regions. However, no matter what industry event one attends, at some stage the conversation invariably turns to the subject of Amazon. For most of the vendors that comprised the judging panel for this category, Amazon is one of – if not the – fastest growing accounts they have, and our judges couldn’t help but be impressed by Amazon’s continued growth in the OP space, its commitment to branded products and the challenge it sets for other resellers. While the industry tries to second guess whether Amazon will ever get serious about the B2B channel, the company continues its relentless march towards its goal of ‘selling everything to everyone’. This award is just one of thousands deservedly won by this remarkable $75 billion company celebrating only its 20th birthday this year.

Industry Achievement Jamie Fellowes The highlight of the EOPA evening, this award recognises the achievements of a person who has made an outstanding contribution to the advancement of the office products industry in Europe. OPI CEO Steve Hilleard delivered a glowing tribute to the 2014 winner Jamie Fellowes, calling the Fellowes CEO “one of the legends in our industry”. Jamie Fellowes may run a $800-million global business that employs 1,800 staff – in fact, the company has grown sales more than 100 times under his leadership – but one of his most engaging qualities is his humbleness; no flashy cars or first-class plane tickets, just an honest work ethic and commitment in equal proportions to customers, staff and family alike. When asked to summarise this year’s winner in just a few words, one family member said: “The simple fact is that people matter to him and, because of this, he matters to people.” And the EOPA judges agreed that he does matter to people, not just in Europe, where he has made such an impact, but also in his home country of the US. In what was a touching moment, Fellowes was clearly moved when he took to the stage to accept the award, too emotional to offer more than a few brief words of thanks for this industry recognition.

OPI’s own Steve Hilleard presents Jamie Fellowes with his second award of the night

w w w.opi.net | OPI Magazine

OPI Partnership 2014 | Event Review

Partnering for

success

Senior-level resellers and vendors meet for strategic discussions in Amsterdam

THERE’S

always a bit of trepidation that goes with the launch of a new event, especially when it means adding two more days into the already-hectic calendars of busy office products professionals. However, it was probably the time efficiency of OPI Partnership which stood out as one of its key success points: 16 one-hour face-to-face meetings in just two days – it’s difficult to imagine being able to do that even at a traditional trade show – assuming that the people you really want to see are there in the first place.

So, what is Partnership? The goal of Partnership is relatively straightforward: to allow senior level executives from the reseller and vendor communities to conduct strategic discussions in an environment that allows for further networking opportunities. Another important factor is that it also gives resellers the chance to meet vendors from outside the traditional office products channel – from growing and important categories such as technology, jan/san and breakroom. Vendors at the first Partnership included Samsung, SCA, Procter & Gamble and Kimberly-Clark Professional. Resellers included Staples, Office Depot, Lyreco, Amazon, VOW, ADVEO, OTTO Office, BPGI, Interaction and PBS Holding. Held at the impressive Hotel Okura in Amsterdam, Partnership got off to the perfect start with a memorable Japanese meal that

really set the perfect tone for the rest of the event. After that relaxing first evening, the next two days were mainly about hard work, with meetings running from 8am to 6pm, and OPI staff on hand to ensure that timings were strictly adhered to. The European Office Products Awards were held after the first day of Partnership meetings – again in keeping with the efficient use of time – and it’s a testament to the professionalism of the delegates that

everyone was up and raring to go early the next morning. The event was deemed so successful that 100% of attendees rated it either ‘excellent’ or ‘good’. Of the resellers quizzed, 90% rated it ‘excellent’, while two-thirds of vendors said exactly the same. OPI CEO Steve Hilleard commented: “The reaction we had was simply fantastic and far outstripped our expectations. We are delighted that through Partnership we have been able to help create new relationships in the office products industry as well as reinforce older ones.”

This is what they said about Partnership 2014 “I think the Partnership event has been fantastic. It was a very efficient use of time and my honest feedback is that it has exceeded my expectations. I’ve had access to more customers in two days than I would normally have in over a year. The next step is to get those negotiations turned into actions, so we’ve got a long list of things to follow up with customers. Very, very positive.” Gordon Scott, SVP & General Manager EMEA, Newell Rubbermaid “I think it was a great event and I would like to thank OPI. It was quite challenging with 16 meetings in 48 hours, but I think it was a good opportunity to meet with 16 key customers in a good spirit. I hope that we will have the opportunity to repeat this kind of event again next year.” Denis Bonnet, European Business Account Director, BIC “OPI excelled itself again by delivering a memorable and very enjoyable event in a terrific venue that was also truly professionally worthwhile. I had a series of exceptional meetings, both formally and informally, and feel that every minute of a very intense period was well spent.” Mark Austen, Managing Director, Office Club “I came with an open mind and I have to say I have been pleasantly surprised. I think what helped was that it was at a neutral venue; normally when you meet a supplier, you meet at their premises or at our premises, or even Paperworld, but it remains a business function. Here, you’re in a hotel with rooms spread around, moving around on the hour every hour and you make sure there’s a precise use of time. We’re very pleased.” Steve Law, CEO, Lyreco

w w w.opi.net | OPI Magazine

Show Review | ED Expo & CAMEX

OP opportunities in the

ed ucation

market

Independent Stationers’ presence boosts office dealer numbers at Ed Expo now is the education sector. Back Independent Stationers (IS) now to school (BTS) is a key time of holds the US Communities year for OP players in many school supplies by Andy Braithwaite markets, of course, but contract, and Texas that does tend to be dealer Gonzalez andy.braithwaite@opi.net retail-focused. However, OP has added a OPI readers are commercial resellers are school supplies probably familiar increasingly looking to component to its with the term ‘adjacent categories’ the schools and higher TCPN cooperative as resellers try to expand their education sectors as a contract (which products beyond traditional office natural extension of their TriMega members can IS’s Tom Ashburn and supplies or develop solutions corporate B2B operations. ‘piggyback’ on). Bob Nimmo aimed at specific Staples is a case in point, The leading US trade market verticals. with educational supplies and association for supplying One key adjacent equipment (as opposed to purely the pre-K-12 schools market is category that resellers BTS supplies) one of the verticals Education Market Association (and manufacturers, it has been developing as part of (EDmarket, and until recently for that matter) have been its massive SKU expansion. In the known as NSSEA) and its annual targeting for some time US independent dealer community focal point is the Ed Expo trade show, which took place in Dallas, Texas from 8-11 March. Radio Shack expanding in college market This year, for the first time, One notable exhibitor at CAMEX was consumer electronics EDmarket co-located Ed Expo with retailer Radio Shack, which has been making inroads into the the CAMEX trade show, the annual US college bookstore market. fair for the $11 billion North Radio Shack – which recently announced major cutbacks in American college bookstore market, its US store network – began targeting the US college bookstore in a move designed to provide cost market two years ago with its branded store merchandising synergies and generate crossover programme. The programme includes wall units, gondolas and buyer traffic. The combined shows some smaller, free-standing point-of-sale displays. created the world’s largest trade Radio Shack handles the product assortment and fulfilment, exhibition for students from using mainly its own private label products, but augmenting pre-school to college, and OPI was these with select high-profile brands such as Beats Audio to draw more customer traffic. pleased to be asked to be an official A Radio Shack spokesperson at CAMEX confirmed that the retailer has signed up 17 college media sponsor.

MOST

bookstores to the programme so far, and has recently introduced a portable display endcap that allows stores to test the programme before signing on as a fully-fledged member. Also drawing attention on Radio Shack’s CAMEX booth was an Afinia 3D printer. The printer – which has a recommended retail price of $1,600 – was mainly being used to promote Radio Shack’s own brand of ABS filament, which is the Afinia printer’s ‘ink’. However, OPI understands that a number of bookstores actually ordered printers from Radio Shack at the show and will use them in their own stores as a way of driving their own foot traffic.

OPI Magazine | April 2014

Affiliate agreement EDmarket recently signed an affiliate agreement with IS which will enable EDmarket members to sell to educational establishments on the IS US Communities school supplies contract. As a result of

ED Expo & CAMEX | Show Review

that agreement, IS had a booth at Ed Expo and held one of its regional meetings at the show. The meeting included a table-top vendor expo that attracted about 30 suppliers and 50 dealers. Staffing the IS booth at the show were group stalwarts Bob Nimmo and Tom Ashburn, who were on hand to help educational dealers better understand the opportunities available to them through US Communities. The arrangement with EDmarket appears to be off to a good start, with about 40 EDmarket members already signed up to the IS programme. IS’s VP of National Accounts Kevin France was also in attendance at Ed Expo, co-presenting a training session called How To Sell To Schools with Laurie Uherek, an EDmarket board member whose dealership Educate & Celebrate is acting as a pilot on the IS/EDmarket affiliate alliance.

Wake-up call Uherek certainly provided a wake-up call to dealers that weren’t up to speed with their e-commerce efforts, reminding delegates that public sector P-Card (purchasing card) holders could generally place orders for up to $1,000 without requiring a purchase order - and this included being able to buy from Amazon. On the subject of Amazon, it appears the e-commerce giant is seriously targeting the schools market, with reports of a direct bid by Amazon on a school supply contract in Texas. Next stop office supplies contracts? Ed Expo attracted approximately 225 exhibiting companies this year,

and the number of dealers in attendance - about 560 from 280 companies represented a 3% increase compared with last year. CAMEX is a much larger event altogether, with more than 700 exhibitors selling a mind-boggling array of products. It appears that anything that can be adapted to a US college’s colour scheme or have its logo printed on it somewhere is fair game for a college bookstore.

Watch an interview with EDmarket CEO Jim McGarry on OPI’s YouTube channel: www.youtube.com/user/ OPILtd/videos

Familiar faces I met a few familiar faces on the show floor:

Jim Benkovic

Former Acme United executive Jim Benkovic – who officially retired a few years ago, but is still bitten by the work bug – is handling the schools channel for breakroom vendor Office Snax. He pointed out the potential of selling into the teachers’ breakroom for OP dealers. Amax President Gary Blanchette introduced a new line of scissors under the Stanley brand for the US market, Gary Blanchette and revealed that new products

from PaperPro and Black & Decker would be arriving in the European office channel this year. MooreCo’s Flora McClung was energetically showing the benefits of her company’s educational furniture, including modular classroom desks and height-adjustable sit/stand desks that drew a lot of interest. Mike Fogarty, CEO of 2013 North Flora McClung (left) American Office Products Awards finalist Wizard Wall, was introducing the company’s first range of products developed for the retail market, and believes there is great potential in the educational sector for signage products that cause no damage Mike Fogarty to school and college walls. ShurTech’s Mike Brewer believes that college bookstores have a strong future despite declining book sales and the threat of online resellers. “It’s the convenience factor,” he says. Mike Brewer

w w w.opi.net | OPI Magazine

VOW+ | Show Review

VOW sets its sights on the future Technology takes centre stage at VOW conference by Alex Wellman alex.wellman@opi.net

THE

theme running through the VOW+ Partner Conference, as around 300 delegates descended upon Nottingham in the UK in early March, was technology. With 3D printers, wireless printers and state-of-the-art speakers on show, the message appeared to be one of change and how to cope with it. Coupled with this was a short presentation on the big screen in the lecture hall at the beginning of the conference that stressed the importance of e-commerce, smartphones, wifi and digital appliances. The message of coping with change is one that VOW Managing Director Adrian Butler may have wished he had adhered to a little closer after his decision to snub the age-old

innovation of stairs in favour of a mis-timed vault resulted in him tripping over in front of a few hundred attendees. The stage fall proved to be little more than a humorous bump in a successful road, however, paved by a VOW team who had some interesting announcements up their sleeves. First among these was the new appointment of former XPD Head of Dealer Development Kim Gladstone. It had been rumoured for some weeks that Gladstone was joining VOW and

VOW is looking for 150 bokz members within three years

the early betting had her joining the company’s bokz reseller programme. This proved to be incorrect though, as Butler revealed that she would in fact be heading up a new marketing division for parent group Vasanta. He also announced that bokz was expected to attain about VOW+ Partner Awards 150 members within three years. VOW finished the conference with an awards ceremony recognising its The team of four partners. – Karen Blatherwick, National Sales Director Martin Weedall Matthew Warner, and Business Development Director Helen Helen Beckett and Beckett hosted the VOW+ awards during a Chris Nichols (see ( black-tie ball. Quality Office Supplies, OfficeIS, also On The Move, OfficeScape and Wessex Malthouse were page 62) 62 – were all named VOW+ Partners of the Year. on hand at the The other winners were: conference to chat • PrintReview Partner of the Year – UOE • WaterCoolers Partner of the Year – to delegates – 120 of Whittaker Office Solutions whom were dealers. • FS Reseller of the Year – VOW’s Helen Beckett (left) and When OPI spoke to Commercial Group Martin Weedall (right) with them, they said the • Furniture Reseller of the Year some of the night’s winners programme was in its – OfficeIS • EOS Reseller of the Year – infancy and had not Quality Office Supplies yet gained any members, • Supplier Stand of the Year – Newell Rubbermaid but they expected this to The awards were one of the final roles Beckett had change quickly when all to perform for VOW before starting in her new role as marketing activities were Marketing Director of the bokz programme. fully exploited.

They also said that interest had been “very strong” among dealers at the conference – many of whom were particularly keen on further information on the destocking part of the programme. VOW National Sales Director Martin Weedall said: “We were delighted to share this quality time with our loyal and committed partners and discuss what we all can do now to create the best possible future for the sector as a whole and as individual businesses.”

Tech time Technology also came to the fore in the ‘interactive zone’ as exhibitors such as Canon, Fellowes and Brother were on hand to show off their latest and greatest innovations. It was a non-traditional product called the Boompod that caught most people’s attention – a wireless, Bluetooth speaker that can link to any smartphone, tablet or computer. Designer Lea Denison told OPI that VOW had actually approached him asking to bring the Boompod into its range of offerings and that it was keen to let OP dealers see what was on offer. He said: “Technology is here and now, and it is moving so fast. People like those here today need to keep up or else they get left behind.” w w w.opi.net | OPI Magazine

Category Analysis | Breakroom

To bean or not to bean? “We are now As coffee continues to grow in the breakroom category, selling much some people are asking if it has become too dominant it flattened out somewhat due to a large more premium customer promotion that did not repeat. He says: “Breakroom has been the fastest by Alex Wellman coffee than growing product class in our company over alex.wellman@opi.net we did five the last four years. It started from a small some time now, coffee has been the base so at the beginning it was easy numbers, years ago”

FOR

driving force behind strong sales growth and healthy profit margins in the breakroom category. And with single-serve brewers like Keurig coming on board, this has only helped grow this part of the category and as a result drinking habits are changing – in the US at least. A report last year by research company Mintel showed that coffee sales in the US reached $11.7 billion – an 11.4% increase from the previous year. Single-serve coffee sales form a significant part of that total with Mintel suggesting sales had grown 213% from 2011 to hit $3.1 billion in 2013. And with the news that soft drinks giant Coca-Cola has bought a 10% stake in Keurig Green Mountain (formerly Green Mountain Coffee Roasters), many believe drinks in the office space is a well that has barely been tapped at all. SP Richards VP Cleaning and Breakroom Supplies Chris Whiting told OPI how the company had experienced 20% growth in the category overall in 2011, 18% in 2012 and considerable growth in the first half of last year before

OPI Magazine | April 2014

but the last few years it has been a strong engine for double-digit growth. “We see great opportunity to grow this and have been offering things like green tea, energy drinks and more health conscious drinks for a while, but coffee is still the biggest segment.” The changing habits of coffee drinkers has also been an opportunity for growth as the ‘Starbucks generation’ demand better-quality coffee.

Whole category growth Whiting says the aim of companies is to keep their staff at work as much as possible and stop them popping down to the nearest coffee shop to pick up a round of drinks. He says: “This means we are now selling much more premium coffee than we did five years ago.” That’s not to say that breakroom is a ‘one-product wonder’. Far from it, in fact. Recent figures from research firm NPD show there has been substantial non-coffee growth too.

Breakroom | Category Analysis In 2013, e-commerce sales for the category – excluding coffee – stood at $167.6 million in the US – up 30% from 2012. Within this total, each division was also up, with tissue and dispenser sales rising 42% to $67.8 million, paper towels, napkins and dispensers growing 23% to $59.2 million, drinks cups and accessories up 20% to 15.2 million, plates, bowls and cutlery rising 30% to $13.3 million, and finally hand cleaners up 17% to $12 million. But with coffee the most desirable product, it is the easiest way for dealers to get into clients and then let them know about the range of other products on offer.

Tea time Hot drinks as the way in is something that has not gone unnoticed in the UK, with Unilever – owner of PG Tips – having recently commissioned a report into buying habits. According to the data, tea is the number one hot beverage in the UK with 25.9 billion units

and we, in the UK, are getting more coffee-confident. “It’s an area where we are focused on producing massive growth and we are going to be working with the right partners to make sure that happens. We are really excited about seeing it grow.” He adds: “The coffee we drink in the UK is appalling. We are hugely passionate about people deserving better and are making a point of pushing that.” The importance of coffee in the breakroom category is something that is not lost on UK wholesaler VOW either – which first offered the product back in 1999. The company is reporting 30% growth within the category and although a lower margin area than some other categories, breakroom does act as a strong lead into sales across the FM area. Hot drinks loom large in the offering, so much so that the wholesaler has worked incredibly hard on developing relationships

Tea is the number one hot beverage in the UK with 25.9 billion units drunk a year

“This is a massive category. Over half of our daily hot drinks are consumed in the workplace” drunk a year. Coffee comes a distant second at almost half that level with 13.4 billion units. However, when looking at the out-of-home market only, it makes for vastly different reading. For the full year 2012, tea accounted for 31.3% of the 3.26 billion servings. Most would think that just below a third represents good sales – and it does – but that figure is far below numbers for coffee at 61.4%. With the office a major part of the out-of-home market, it is no wonder Unilever is eager to increase its share and make it easier for British workers to have a good cup of tea at work. Marley Coffee has also set its sights on the UK and is planning a greater push in the out-of-home market this year. UK Head of CSR Andy Gold told OPI that the company is keen to replicate here what has been happening in the US for some time. He says: “The K-Cup has been a huge success in the US and delivers a great cup of coffee and there is no reason why that could not be giving lots and lots of pleasure to people over here. “We think there is huge potential for people to enjoy fresh coffee in their office

with key suppliers such as Nestlé, Tetley, Mondelez and Unilever. Head of Facilities Supplies Debbie Nice says: “This is a massive category. Over half of our daily hot drinks are consumed in the workplace, so we know that we are only scratching the surface with current sales. The supermarkets may try to get some more of the office market by offering more delivery solutions, but they are only likely to be interested in the larger office sites.”

Case of the jitters But there’s work to be done to change the drinking habits of people in the UK as shown by recent research by the International Coffee Organisation. It placed the UK below Germany, France, Italy, Spain, Japan, Belgium and the US as an importer of all forms of coffee. There are also other risks associated with the drink. And these are far more volatile than anything associated with paper cups, plates or sweets. They became apparent w w w.opi.net | OPI Magazine

Breakroom | Category Analysis in the second half of last year when the breakroom category experienced a slight flattening – thanks to deflation in the coffee market. Whiting says: “Coffee is the second most volatile commodity next to oil, so we had a few years when pricing continued to escalate. In the wholesale business, as long as everyone is going up, that’s a good thing. “But when prices come down and you are sitting on stock it gets ugly really quickly. So dealers should let their wholesalers worry about these cycles, and not expose themselves to the risk.” This is not the only problem with coffee which, like other drinks or foods in the category, has a use-by date that has to be adhered to. At the point of purchase from a manufacturer, coffee will have Coffee sales a freshness range of around in the US to nine months, but by the time reach $11.7 it has been shipped from the billion in manufacturer to the wholesaler 2013 and then again to the dealer, a good portion of that time will have been eaten up. Whiting says: “Our industry is adjusting to the warehouse management nuisances of handling freshness-dated products. You

innovate and move forward. There are still thousands and thousands of consumers who don’t realise they can get all these goods from an office products dealer. So there is still a huge awareness opportunity.” Having grown every year since the business began – including 12.5% last year – Baker believes that the whole category in the US can grow “six or seven times the size of what it is now”, but it needs a slight shift in focus away from the precious coffee bean. He explains: “If you go out and you want to talk only about coffee, you probably don’t have the most competitive price because Costco and Walmart will do better. So you need to go out there and talk about the category rather than just the item.”

Something to boast about Indeed, many businesses now see their entire breakroom offering as something to boast about. United Stationers Director of Cateory Marketing Vince Phelan says: “It wasn’t that long ago that the minute times got tough, people cut the coffee services as a cost-saving measure. And I think they’re

“If you go out and you want to talk only about coffee you probably don’t have the most competitive price” really have to keep your eye on it, and using a wholesaler really makes sense in the snacks and beverage category.” As someone who has to take use-by dates very seriously, Office Snax owner Bill Baker is of the opinion there is perhaps too much focus on coffee within the category and there can often be a somewhat lazy attitude to the breakroom. Starting back in the early 2000s with just 12 items on offer, the company now has close to 100 products – 85% of which are under the Office Snax brand. Baker says: “The breakroom category is still low-hanging fruit and that does not drive people to

recognising that some of those moves are a little short-sighted. “Now you see companies like Google offering unbelievable amenities for their employees and obviously not everybody can afford to do that. However, we have definitely seen companies emphasise the breakroom amenities they’re offering. They view it as another way to differentiating themselves as an employer to keep their workforce satisfied.” While the breakroom is not just coffee but snacks, plates, napkins, hand sanitisers and much more, the question to ask is whether or not dealers are taking advantage. So – to bean or not to bean?

www.opi.net | OPI Magazine

Ergonomics | Category Analysis

Time to make

a stand As companies strive to meet the needs of their employees, furniture takes centre stage with productivity, comfort and safety all a requirement

These changes in work habits have naturally had an impact on the type of furniture needed in the workplace, but are enough companies wise to the needs of their employees?

Pent-up demand

by Alex Wellman alex.wellman@opi.net

A “Work is changing at a dramatic pace and companies have not significantly invested in their space in the last 15 years”

decade or so back it would have been fairly easy to describe the typical office. Uniform desks? Check. Adjustable seating? Check. Partition screens? Check. Since then, we have had a worldwide economic crash that has forced some people into different working habits, while technology such as the cloud, smartphones and tablets have given others the opportunity to free themselves from the constraints of an office. Getting into work early to get ahead of the game seems to be the norm, and for many employees across the globe, the time spent at the office has either grown longer or become more spasmodic. Indeed, a report last year suggested that around 82% of people in the UK are working more than 40 hours a week. A similar report in the US broke it down into gender groups, with 86% of men and 66% of women working more than a 40-hour week.

It is a topic that Steelcase CFO Dave Sylvester touched on in a recent earnings conference call in February, when he said: “Work is changing at a dramatic pace and companies have not significantly invested in their space in the last 15 years. There’s pent-up demand to modernise that space.” So there is belief within the OP industry that there is a need, and it would appear that clients are telling dealers, manufacturers and others what they want. General Manager of Safco Products, Nat Porter, says: “People want to be more active. They want to socialise and collaborate more, and yet need spaces to concentrate. More informal ways of working is the key.” It seems this desire for staff to work in more mobile, collaborative settings is already having a positive impact on the OP furniture market – in the US at least. The US Business and Institutional Furniture Manufacturers Association (BIFMA) announced recently that it expects the US market for office furniture to grow by 4.2% to reach $12 billion this year and by a double-digit 12.1% in 2015 to hit $13.5 billion. BIFMA also said it expects production to grow by 2.8% in 2014 and 10.4% in 2015. w w w.opi.net | OPI Magazine

Category Analysis | Ergonomics Chief among the reasons for this positive outlook, is the fact that there is the desire for different working spaces to complement the new working habits of employees. Porter says: “We are working on a group of products that support more active working postures, primarily standing over sitting. In addition to a range of work surface options to support working while standing, we will introduce new footrests designed specifically for people who stand while they work.” On top of this, the company has been working on its new Kalyde Collection – a line of furniture designed for use away from the traditional desk. Porter comments: “Most of the furniture we see being used in open, collaborative spaces was designed for the lobby and lounge and was aimed at waiting, not working, areas. “Kalyde is specifically designed to support small groups of people working for short bursts in informal, in-between spaces.” Another group of products it is focusing on with ergonomics in mind is one which other manufacturers are paying attention to as well – sit/stand. Porter says: “The new direction we have taken in ergonomics directly relates to the flexibility of sit and stand. We have been implementing means to make the traditional office space more flexible by having a combination of mobile, modular and sit-to-stand.” Senior Marketing Communications Manager at Bush Industries, Bruce Younger, told OPI that his company was also targeting the booming sit/stand category after positive feedback from clients. He says: “The biggest change recently has been that we are looking at introducing a sit/ stand height desk. We are finding that there is an interest in the marketplace for people to stand and work on something. We are also looking at adjustable height desks, so they can accommodate people of different heights. There are times when you want to be standing over something, like a blue print for example, and this will really work for that. Another US manufacturer highlighting sit/ stand as an area of growth is MooreCo which explains that, while sales data is still scarce due to the products being so new, it had experienced a “quick acceptance” from the market for its line of products. VP of Business Development at MooreCo Kris Dixon says: “The new direction we have taken in ergonomics mainly relates directly to the flexibility of sit/stand.”

OPI Magazine | April 2014

Like other manufacturers, the company has targeted the traditional office space, but in addition has set its sights on another market – the students and school market – which has also seen a shift towards more mobile needs. The Up-Rite sit-to-stand student desk with a pneumatic adjustment and a curved desktop is a good example of a product aimed squarely at the education sector. The Perch sit-to-stand stool, meanwhile, is designed more for leaning than sitting, explains Dixon. “It has a height adjustment and allows an upright carriage position which increases attention span, boosts energy levels and improves metabolism.” She adds: “Repositioning yourself is a big factor since too much time in any position isn’t considered to be the best for your health.”

No place like home It’s is not just in the office where these products are gaining traction. With changing working habits, more people than ever are now working from home and this means having furniture that works in this space. Younger says: “Often it makes sense to set your employees up in a home office rather than bringing them in. We have some studies which show that people who are set up in a professional office space at home are more productive than those who have to travel to and from work. They feel more comfortable and relaxed and they still get the work done.” The manufacturer has a team that goes to the homes of its clients’ employees, assesses the space they work in and comes up with a solution using its furniture. Younger adds: “It is something we have had success with and one client in particular had around 200-300 home offices.” With the outlook positive, it is surely time that office furniture stood up for itself.

“Often it makes sense to set your employees up in a home office rather than bringing them in”

Your OPI

On the move

OP personnel changes from around the globe We would love to hear from you. Email editorial@opi.net, Tweet us @OPInews or you can write to us at OPI, Diamond House, 36-38 Hatton Garden, London, EC1N 8EB, UK

USA

Gould Paper has appointed Ivy Frimer as President of its newly created Ocean Paper division. Formerly President of Priority Papers, Frimer has 22 years of experience in the industry and will be responsible for all purchasing, sales, warehousing and distribution of prime and ‘opportunity’ tonnage at Ocean.

Europe

UK reseller office2office announced that COO Steve McKeever Steve McKeever resigned at the beginning of March to take on a role outside the OP industry. The company revealed it would not employ a replacement and instead would hand his duties over to its operations team.

Former VOW Sales Director Ewan Dowson has joined The Business Performance Group as Director of National Accounts. The new role will see Dowson supporting the development of wholesaler relationships in the UK while also helping its partners to grow the retail and e-tail sides of their businesses.

Former XPD Head of Dealer Development Kim Gladstone has joined Vasanta as Managing Director of its newly formed Marketing Services Division. Her responsibilities include commercialising the group’s existing marketing services and creating new features to help clients develop their businesses.

Hugh Darcy, Fellowes’ VP Global Sales and Marketing for its business machines division, Hugh Darcy has left the firm. Darcy had been with Fellowes for 11 years and was responsible for the company’s binding and laminating unit before taking on the global sales and marketing role last year.

Meanwhile, UK dealer group XPD has appointed Vida Barr-Jones as its new Director of Business Development – replacing Gladstone. Barr-Jones, who was with Spicers for 11 years until 2012, joined XPD at the beginning of April. The appointment coincided with XPD closing its VOW-aligned Simply Office dealer group and resuming its exclusive wholesale partnership with Spicers, something it had from 1994-2006.

International Founder and CEO of South African dealer group Office National Africa (ONA) Ryan Bidgood has stood down from the company to take on a new role at a family venture in waste management. Despite standing down as CEO of the company he set up in 2004, he remains a director and owns 45% of ONA’s shares. Wihan Oosthuizen was chosen as his successor and took on the CEO role on 1 April. He has spent the past 11 years in the industry – five of which as Bidgood’s right-hand man at ONA.

Ryan Bidgood

OPI Magazine | April 2014

Europe The senior team in charge of driving Vasanta’s new bokz reseller programme was unveiled in late February. Karen Blatherwick, formerly of Westcoast, XMA and Corporate Express, was appointed Sales Director while long-time Vasanta employee Matthew Warner was made Operations Director with responsibility for the bokz destocking and bespoke stockholding programme as well as the final-mile delivery solution. Joining them was former VOW Business Development Director and Marketing Director Helen Beckett who became Marketing Director. Former Office Friendly Commercial Director Chris Nichols completed the quartet of senior appointments by becoming Commercial Systems Director. Spicers confirmed that its CFO Sarah Jones left the company in March following discussions with the UK wholesaler’s private equity owner Better Capital. Having joined in September 2010 as Finance Director UK, Jones had been named CFO following the Better Capital acquisition in January 2012. Experienced finance and turnaround executive Colman Moher was brought in as interim CFO. France-based vendor CEP Office Solutions has appointed Caroline Gerard as Key Account Manager in a move aimed at strengthening its sales team. Formerly Trade Marketing Manager with pen manufacturer Pilot, Gerard was brought on board to develop CEP’s sales in France and in its export markets of Scandinavia, Benelux and the Middle East. Portuguese paper manufacturer Portucel brought in Diogo da Silveira as its new CEO on 1 April. Formerly CEO of Açoreana Insurance, da Silveira replaced interim CEO Luís Deslandes who had been in place since 28 February following the resignation of José Alfredo de Almeida Honório. Hervé Guichard has resigned from the board and his role of Deputy CEO of Manutan – the company set up by his father Jean-Pierre Guichard – following March’s annual general meeting. Manutan said that Guichard left due to “profound differences of opinion” with the other board members over the group’s strategy

and governance. It added that Xavier Guichard, his brother, would remain as CEO. German business products manufacturer Sigel has appointed Sven Reimann as International Sales Director. Formerly International Business Development Manager with the company, Reimann started his new role in January of this year. German envelope group Mayer-Kuvert-network has named its new management team following the sudden death of co-CEO Edlef Bartl in February. Thomas Schwarz, who had been brought into the executive management team as co-CEO by Bartl last year, was confirmed as new CEO. Joining him on the management team are Francine Mura, Ingrid Bartl, Udo Karpowitz, Martin Pagenkopf, Thomas Schmidt and Martin Blümle.

International

Lyreco has appointed Mike Milward as Managing Director of its Australian operations. He replaced Bryn Sharp who left at the end of March following more than two years with the company. Chinese distributor Union Technology International (UTec) has named Kieran Ho as Deputy General Manager following the resignation of General Manager Iris Ngo in February. UTec said Ngo resigned to pursue personal interests and that Ho would now lead all sales and marketing activities while also overseeing the company’s operations.

Your OPI

5 minutes with... Bill Baker, President, Office Snax

“Being fired builds character”

Describe what you do in less than 20 words. I assist in growing the breakroom category in the office products industry.

Things you begrudge spending money on? Taxes. There seems to be no respect for the taxpayer’s dollar and how it is spent.

Your first full-time job? My family had a funeral business and I worked there for some years.

If you won the lottery, what would be the first thing you would buy/do? I would be very quiet about it, but I would try to help people that have a genuine need.

The worst job you’ve ever had? See my previous answer! The worst moment in your career? I have been fired two or three times at least, and while they are difficult times I do believe it can be the making of someone. Being fired builds character. The biggest change that has taken place in the industry since your career began? The cell phone. You are instantly available but also have far less privacy. The industry figure you most admire? Why? Jeff Howard, Jack Miller and Irwin Helford. They donate millions of dollars to City of Hope and choose to give back when they could instead just sit and relax in Palm Springs. Your greatest strength? Tenacity. You just keep going and asking until you get what you want. Your favourite office product? The Dymo label maker. It was the first company I worked for so I have a romantic attachment to them.

Have you got a claim to fame? Well, some say I’m the jelly bean king! If you had to sing at a karaoke next weekend, which song would you choose and why? Johnny B Goode – it was the first record I ever bought. Any annoying habits? I bite my nails. The best concert you have ever been to? There was a gala at President Reagan’s second inauguration and every star imaginable was there – Sinatra, Cher – that was really spectacular seeing them all sing. Have you ever done anything dangerous or daring? I used to fly airplanes and I had a couple of close calls – all self-inflicted though. How would you like to be remembered? A father, a husband, a brother and a friend.

What do you like best about the OP industry? There are some really wonderful people – all over the world. You get to know them all and the husbands, wives and kids. What do you like least about it? The lack of innovation. It doesn’t seem like companies are investing in new products or ideas. If you could invite two famous people for dinner, who would they be and why would you invite them? Barack Obama and Dick Cheney. I would sit there, watch the fireworks and then pick up the bill.

What were your childhood ambitions? Every kid wants to be a cowboy, but other than that I just wanted to experience life. www.opi.net | OPI Magazine

Your OPI

Calendar Key dates in your industry If we are missing an event please let us know. Contact editorial@opi.net Do you have an event that you would like to promote in the OPI Calendar? Please contact Fergus Cox for further information about having an extended entry and pricing. Email: fergus.cox@opi.net

Web: www.opi.net/calendar

MAY 21-23 Corwell Expo Corwell HQ, Budapest, Hungary JUN 06-08 Office Club Annual Conference The Belfry Hotel, Birmingham, UK

JUN 16 BOSS Federation BenGolf Day Wyboston Lakes Golf Centre, Bedfordshire, UK JUN 19-20 Synaxon UK National Conference Hellidon Lakes Golf & Spa Hotel, Northamptonshire, UK June 19-20 Superstat Conference The Belfry, Oxford, UK JUN 27-28 Nemo Annual Conference Slaley Hall, Hexham, UK

APR 01-02 London Stationery Show 2014

JUL 09-11 ISOT 2014 Tokyo Big Sight, Japan

Contact: Chris Leonard-Morgan Email: clm@firstevents.com Tel: +44 20 8462 0721; Web: www.stationeryshow.co.uk The only UK exhibition dedicated to stationery products, writing instruments and accessories for the home, school and office. Organiser of National Stationery Week.

JUL 15-16 Bob Parker Memorial Golf Outing Kiawah Island Resort, Ocean Course, Kiawah Island (SC), USA

Business Design Centre, London, UK

APR 09-13 Istanbul Stationery Office 2014 CNR Expo, Istanbul, Turkey APR 29 The Society of Old Friends – Members Dinner and AGM RAF Club, London, UK APR 29 BOSS Young Managers’ Conference Aston Conference Centre, Birmingham, UK MAY 06-09 ISSA/Interclean Amsterdam RAI Convention Centre, Amsterdam, the Netherlands 64

OPI Magazine | April 2014

JUN 11-14 SP Richards Advantage Business Conference 2014 – ‘Right Now’ Gaylord Opryland Resort Hotel, Nashville (TN), USA JUN 12-13 UFIPA Annual Conference JW Marriott, Cannes, France

SEPT 17-19 EPIC 2014 Joint Independent Stationers/TriMega Convention Westin Diplomat, Hollywood (FL), USA OCT 06-08 Pinnacle Annual Meeting and Vendor Forum 2014 Embassy Suites Chicago O’Hare Hotel, Rosemont (IL), USA

JUN 13 North American Office Products Awards 2014

Gaylord Opryland Resort Hotel, Nashville, TN, USA Contact: Janet Bell Email: janet.bell@opi.net Web: www.opi.net/NAOPA2014 The fifth annual awards programme for North American manufacturers and dealers. Encouraging innovation and giving recognition to those working to deliver real value.

SEPT 22-24 OPI European Forum 2014

Grand Hotel Huis ter Duin, Noordwijk, the Netherlands

Contact: Janet Bell Tel: +44 20 7841 2941 Email: janet.bell@opi.net Web: www.opi.net/EF2014 An invitation-only forum for CEOs and senior executives from the business supplies and associated sectors.

OCT 07 Advantia 2014 Conference Chesford Grange Hotel, Warwickshire, UK OCT 08 Howard Wolf Golf Classic Cantigny Golf Club, Wheaton (IL), USA OCT 09 Spirit of Life Gala Navy Pier, Chicago (IL), USA OCT 10-12 The 15th Annual Office Brands EXPO Sheraton & Westin Denarau Island, Fiji OCT 22 BOSS Awards ICC Birmingham, Birmingham, UK NOV 11-15 Office Partners’ Grand Ole Gathering 2014 Nashville Airport Marriott, Nashville (TN), USA NOV 20 Integra Annual Conference East Midlands Conference Centre & Orchard Hotel, Nottingham, UK

European 22-24 September 2014 Grand Hotel Huis ter Duin, Noordwijk, the Netherlands

An invitation-only forum for CEOs and senior executives from the business supplies and associated sectors. The European Forum offers a unique opportunity to hear from expert speakers, explore future trends, engage in frank discussion, share ideas and network with fellow industry leaders in a confidential environment.

Invitations

If you would like to be considered for an invitation please email steve.hilleard@opi.net or visit www.opi.net/ef2014 for more information.

Organised by Office Products International

Your OPI

Final word Your industry, your opinions

Ron Beal, Director of Office Products & Wholesale Channel, Kimberly-Clark Professional

Breakroom sales enhance staff health and wellness THE

breakroom is here to stay. As OPI pointed out in a March 2013 article, it’s a category that’s delivering multimillion and, in some cases, billion dollar annual revenues with “significant potential for growth across the OP spectrum”. There are many reasons why. Chief among them: It’s the “heart” of the office – the go-to location for employees when they need a rest, a cup of coffee, something to eat. As companies expand and staff work longer hours, the breakroom is the ideal place for an employer to ‘give back’ and allow employees to take a break, have a snack or their lunch in a clean and hygienic, well-stocked area. So it’s essential that employers make sure the breakroom is a warm and inviting space and, above all, clean and hygienic. That means providing employees with the tools and knowledge they need to adopt good hand hygiene and surface sanitation practices. If not, the breakroom can end up being the germiest place in an office. According to a 2012 Kimberly-Clark Professional study, the place where US workers eat and prepare their lunch topped the list of office germ hot spots, with sink and microwave door handles found to be the dirtiest surfaces touched by office workers on a daily basis. However, there are ways to combat workplace germs and office product suppliers can help. How? By encouraging businesses to educate employees about how germs are spread and then providing them with solutions to break the chain of germ transmission. In doing so, we can help them create exceptional workplaces that are healthier, safer and more productive. Some easy steps include: • placing disinfecting wipes in kitchens • providing employees with easy access to hand sanitisers • offering plenty of paper towels – since drying with a paper towel can reduce the spread of germs on hands by up to 77% – as well as soap and facial tissue • educating employees about the importance of hand and surface hygiene The last bit is important and why we encourage everyone to adopt the ‘HYGIENIFY’ protocol – wash, wipe, sanitise –

three steps proven to reduce the spread of cold and flu germs in the workplace by 80%. This reduction in probability of infection is based upon mathematical modeling referenced in the Workplace Wellness Intervention Study. At Kimberly-Clark Professional, we manufacture breakroom products that fall into about seven different product categories. These include Kleenex brand facial tissue, Kleenex and Scott brand paper towels and bathroom tissue, Kleenex brand soaps and hand sanitisers, and heavy-duty Wypall brand wipes for tough cleaning jobs. We also offer compact, hands-free solutions for the restroom to provide a clean and hygienic space for everyone. Our high-capacity towel, bathroom tissue and soap systems can help turn breakrooms and offices into exceptional workplaces that help keep employees healthier, safer and more productive. By helping office products customers protect their most important assets – their employees – companies can help their businesses grow and thrive. And, remember, the breakroom is an entry point that can lead to many other sales opportunities within an office. So help your customers keep it as clean and hygienic as possible. It will pay off for them as well as for you. Ron Beal is Director of Office Products & Wholesale Channel with Kimberly-Clark Professional, based in Roswell, US. Kimberly-Clark Professional partners with businesses to create exceptional workplaces, helping to make them healthier, safer and more productive. For more information, visit www.kcprofessional.com.

“As companies expand and staff work longer hours, the breakroom is the ideal place for an employer to ‘give back’”

OPI Magazine | April 2014

Want the final word? Email editorial@opi.net or write to OPI, Diamond House, 36-38 Hatton Garden, London, EC1N 8EB, UK

IN THE NEXT ISSUE • Big Interview with Tomas Bergström, CEO of Scandinavian Ofﬁce Group • The latest from the ofﬁce paper category • The 2014 OPI Top 100 global resellers