Office Depot Starts Expansion

Steve Odland, chairman and CEO of the nation's second largest office supply chain, said the company plans to eventually add 1,000 new stores to its North American base and improve its international growth with a string of new acquisitions. The company currently has more than 1,000 stores in North America and more than 200 retail outlets in 21 other countries.

"We have big categories and big opportunities outside of North America," he said, noting that Office Depot recently expanded by 100 stores when it entered a joint venture arrangement in Mexico.

Odland, speaking at the Credit Suisse Consumer & Retail Conference here, said the firm plans to "refresh" its entire store base during the next two to three years, spending $225,000 to $250,000 per store to enhance the look of its aging North American locations. Company officials recently agreed on a prototype design and will begin renovation work in the near future.

Along with Office Depot's expansion and renovation plans, Odland said the Delray Beach, FL-based retailer will make a major push to grow its office supply business through private label branding, which offers higher profitability. About 18.1% of the merchandise currently sold at Office Depot stores falls under the private label category, he said.

Along with its push toward more private label merchandise, Odland said the company has added a telephone sales force that has already effectively increased the buying frequency of repeat customers and is now working to move many of its small business customers to direct, rather than retail, sales in order to increase profitability even further.

In Europe, where the firm operates more than 60 Office Depot stores, the focus will be on increasing phone and retail sales, integrating private labels into the merchandise mix and launching a loyalty program for repeat customers, he said.