Office Depot Israel General Manager Quits

[Anonymous]

Office Depot Israel General Manager Quits

With mounting losses, there is concern that the Hamashbir-owned company could seek a stay-of-proceedings.
Office Depot Israel Ltd. general manager Tzahi Fishbein has resigned, citing, "After deep thought and in view of the circumstances created in the company from the mutual lawsuits with Office Depot Inc., the lack of capital injections and/or a credit line for the company’s proper functioning, I have concluded that I cannot continue to run the company."

While serving as Office Depot Israel’s general manager, Fishbein with a group of investors was in negotiations to acquire the company from Hamashbir 365 Holdings Ltd. (TASE:MSAH), which holds the franchise from Office Depot Inc. (NYSE: ODP). In his letter of resignation, which Hamashbir disclosed in a notice to the TASE today, Fishbein said that he would continue the negotiations because "the conditions have been created to allow the proper functioning of the company", hinting that it had not been functioning properly.

In August, Hamashbir notified the TASE that the parties had signed a letter of intent for the sale of Office Depot Israel to Fishbein and the investor group for nothing, and that Fishbein would invest NIS 30 million in the retail chain. No agreement has been reached in the subsequent talks.

Office Depot began operating in Israel in 1994, originally as a partnership between Office Depot Inc., Fishbein, and Super-Pharm Ltd. Office Depot Inc. bought out its partners in the Israeli franchise in 2008 at a company value of $80 million, and sold the franchise to Hamashbir in December 2010 for $47 million. Hamashbir had hoped that Office Depot Israel would become the department store chain’s growth engine.

Hamashbir promised to boost Office Depot Israel’s sales from NIS 620 million in 2010 to NIS 1 billion in 2013. It didn’t.

Mounting losses by Office Depot Israel are weighing on Hamashbir. Office Depot Israel lost NIS 19 million in the first half of 2012, including NIS 5.5 million in the first quarter, after losing NIS 37 million in 2011. Most of the losses are due to poor management and difficult market conditions, as well as accounting errors related to suppliers’ bills and estimates for provisions.

Hamashbir has disclosed Office Depot Israel’s losses in Hamashbir’s latest financial reports as part of the negotiations for the sale of the business. Hamashbir lists Office Depot Israel as a terminated activity that is up for sale, and does not report its results separately. Office Depot Israel had NIS 150 million revenue in the first quarter of 2012, after NIS 600 million in 2011.

Losses by Office Depot Israel caused Hamashbir, controlled by chairman Rami Shavit, to lose NIS 18 million in the first half, including NIS 17 million in the second quarter. Excluding Office Depot Israel, Hamashbir’s net profit was NIS 11 million in the first half.

Meanwhile talks continue in the Tel Aviv District Court on Office Depot’s NIS 51 million suit against Office Depot Israel. Judge Avigal Cohen agreed to freeze legal action for three weeks while the two sides continue talks.

But following the resignation of Office Depot Israel CEO there is concern that the company may see a stay-of-proceedings.

http://www.printweek.com/news/1156084/office-depot-bolsters-print-management-offering/
Office Depot bolsters print management offering
Office Depot has developed a business services division to help the company’s four exisiting departments focus on business management.
The division will draw attention to Office Depot’s "best kept secret" in that it has offered management services for print and facilities businesses for many years but has been "hiding its light under a bushel" according to Craig Brown, who is heading up print solutions within the business services division.

Brown, previously head of sales at Office Depot, has taken on the role since the new division’s launch in September.

Office Depot’s three other business departments – managed print services, facilities supplies and office furniture – have also been assigned dedicated business services leaders to focus on the complementary business management offering alongside supply of consumables.

Brown said: "Office supplies is our core market but I don’t imagine there are many businesses out there working out how they can spend more.

"It is a contracting market and we need to differentiate ourselves from others in that environment to provide much more to our customers than many of our competitors are doing.

"By repositioning the division we are making a statement that there is far more to Office Depot than just pens and pencils."

He claimed that Office Depot was rated among the UK’s top 20 print management companies by turnover yet "someone going for a print management solution is not naturally going to consider Office Depot".

The stationery giant has brought on a number of new staff to aid the restructure, including its operations manager who has had 20 years’ experience in print with Office Depot competitors.

Brown said: "We’ve always had print specific people in our business. We are seeking to pluck the best we can find from the industry to add the human element to what we provide."

As part of the business division’s strategy, Office Depot is in the process of developing a workflow for its customers, to be deployed in April 2013.

As yet, it remains unnamed but will offer an instant pricing engine for end users within a web-to-print hub.

Brown said: "If we look at where our core business sits we have a tremendous penetration into the retail market place and typically we have supported back office requirements within that sector.

"Increasingly we are looking at deploying tools that are much more front-of-house."

The technology aims to give smaller franchisees the power to tailor print by enabling local stores to order point-of-sale displays specific to products currently on sale.

Office Depot confirmed its commitment to public sector print earlier this year when it won a spot on the Government Procurement Service (GPS) framework to offer managed print and e-commerce to NHS bodies, local authorities and the police.

Brown said only a couple of contracts had been awarded across the framework since Office Depot’s appointment in July, but the team is working closely with local authorities to promote its benefits.

He added: "Part of our strategy was to have a much greater footprint in the public sector. Public sector procurement to an extent is underpinned by frameworks so we wanted to be on the broadest possible framework for the public sector as we can be."

"We have got a healthy concentration of public sector customers in our core business and had been historically underpenetrated from a print solutions perspective so it was a natural area for us to move towards.

"Our strategy is not exclusively geared towards the public sector. It’s about taking a broader gamut to our customers."

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October 25, 2012 at 8:49 AM