OFFICE DEPOT: European sales target for growth

London —- In the battle of office supply retailers, the fight for the European customer is in full swing, with Office Depot hoping to lead the charge.

The Delray Beach, Fla.-based company is expanding its online business, searching for lucrative partnerships, and responding to the needs of local markets, said Dirk Collin, managing director for Office Depot Europe, who is based at the company’s European headquarters in Venlo, Netherlands.

For example, in the Czech Republic, customers are increasingly concerned about the environment.

“And so every time we sell a box of paper to a customer, we give out a certificate to that customer showing that we are planting trees,” he said. “This is important to our customers there. We will expand this to other markets, too.”

Both Office Depot and its larger rival Staples are increasingly looking toward their international operations to offset sagging customer demand in the American marketplace.

In July, Office Depot reported a $2 million loss for the second quarter. But the international division reported a sales increase of 13 percent to $1.1 billion compared with the same period last year.

Office Depot recently announced plans to expand into Sweden through the acquisition of one of the region’s largest office supply companies, AGE Kontor & Data AB.

At the same time, Staples won approval from Corporate Express to take over the Dutch firm with a $2.65 billion bid.

Collin said there is space for more than one player in Europe.

“Although some countries such as the U.K. and Spain have more economically challenging markets at the moment, there are still opportunities for growth in parts of Europe and especially in Eastern Europe,” he said.

Collin also said there’s room for more consolidation in Europe.

“We don’t have an aggressive strategy to consolidate or elbow out smaller players,” he said. “But we’re always interested in partnerships with others and are looking at that.

“Europe is still fragmented, especially in some countries that have lots of retailers and resellers and mom-and-pop stores,” he said.

Although Office Depot has 130 retail stores in Europe, located in France, Sweden, Hungary —- and also Israel, which falls under the European umbrella —- much of the company’s focus is on catalog and online sales.

Collin said Office Depot racks up $5 billion in online sales a year, a third of the company’s total worldwide revenues. Some $1.5 billion in online sales occur in Europe.

“We believe the way to go to market in Europe is through our contract and catalog sales with a strong focus on the Web.”

There is one country in which Office Depot is likely to open more retail stores: Israel.

“We have 47 stores in Israel, and even though it’s not a large country we can expand with more stores there,” Collin said. “But we’re also growing our online and catalog business as the market there still offers excellent opportunities.”

Especially popular in Israel and throughout Europe is Office Depot’s Green Book catalog of environmentally friendly products.

“We have introduced this in several countries in Europe,” Collin said.

Earlier this year Office Depot launched its Foray product line in Europe, another step towards globalizing the company’s brands.

“Our new assortment of the Foray writing instruments is giving us a high-quality product,” Collin said. “We are increasing our choices for customers. We developed a private-brand green line.

“We are working hard to make sure our customers are not only satisfied but delighted,” he said.