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OfficeMax

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OfficeMax
Company typePublic NYSE: OMX
IndustryRetail
FoundedCleveland, Ohio (April 1, 1988) ( first store July 5, 1988)
HeadquartersNaperville, Illinois, U.S.
Number of locations
991 (April 2011)[1]
Key people
Ravi K. Saligram President and CEO, Michael Lewis President, Retail
ProductsOffice supplies
RevenueDecreaseUS$7.1 Billion (2010)[2]
Number of employees
32,300 (2008)
Websitehttp://www.officemax.com/

OfficeMax (NYSE: OMX), is an office supplies retailer that was founded in 1988 and is headquartered in Naperville, Illinois.

History

Kmart

On April 1, 1988, OfficeMax was founded in Cleveland, Ohio, by Michael Feuer (who served as chairman and chief executive officer) along with seven other associates. On July 5, 1988, OfficeMax opened its first retail store in the Golden Gate Shopping Center in Mayfield Heights, Ohio; this location still remains open.

OfficeMax grew by acquisition with Office World first in November 1990 with Office World executive and Montgomery Ward becoming minority shareholders.[3] In 1990 Office Square stores were purchased from Kmart, in exchange for a 22% equity stake.[4] In 1991, Kmart increased its stake in OfficeMax to 92%.[5] In January 1992, OfficeMax acquired five sites from Highland Superstores in Boston. OW Office Warehouse, a Virginia-based regional chain, was acquired in June 30, 1992.[6] The company then acquired BizMart, its largest acquisition (104 stores) to date, in 1993 from Intelligent Electronics. [7] On August 16, 1993, Officemax joined Kmart and most of its other specialty stores in the "largest power center" in Utica, Michigan and joined by Best Buy.[8] OfficeMax acquires a 19% stake in Corporate Express, a contract stationer.[9] In May 1994, Kmart put a plan in front of its stockholders to sell 20% to 30% of each of its specialty store subsidiaries shares on the open market to pay down debt and fund future expansion of the subsidiaries.[10] Kmart's shareholders turn down the proposal at their June 3 annual meeting.[11] In November 1994, FurnitureMax store within a store concept begins testing in the Ceveland market.[12] In 1995, Kmart sold off 51% of OfficeMax shares, spinning off the company and became a NYSE-(OMX)-publicly-traded corporation, based in Shaker Heights, Ohio.[13]

Public corporation

In 1995, OfficeMax became one of a handful of companies doing some business on some part of the internet through internetMCI.[14] Kmart sells the remaining 25% of the shares of OfficeMax that it held.[15] On July 14, 1996, a new kiosk program called BatteryMax was test launched in two Phoenix stores. BatteryMax were operated by Batteries Batteries for Everything. OfficeMax also filed lawsuits for infringement for use of the "Max" name against Med Max and Circuit City for CarMax, its used car business.[16] For the next few years OfficeMax and its rivals, Staples and Office Depot, continued to open new stores, saturating the market segment.[17][18][19][20][21][22] With the planned merger of Office Depot and Staples in 1996, the company moved to increase store openings over the next year with 57 opened in the first quarter of 1997.[20]

OfficeMax developed regional delivery centers, and invested in its super-regional PowerMax distribution centers in Las Vegas, Nevada, Hazleton, Pennsylvania, and Birmingham, Alabama after litigation began with previous logistics and shipping provider.[23] A small sized store concept, OfficeMax PDQ, test was launched in Woodmere, Ohio in late June 1998.[24] All the while OfficeMax was losing the most money of the three. In 2001 through 2003, OfficeMax began closing under-performing stores in some neighborhoods and in regions where it didn't have a strong presence. However OfficeMax was acquired in 2003 by Boise Cascade Office Products Corporation,[25] which had a nationwide office supply delivery operation based in Itasca, Illinois.


Boise Cascade

Following the 2003 acquisition by Boise, OfficeMax has undergone numerous internal changes, including rebranding its copy and print centers from CopyMax to ImPress Print & Document Services. This change was primarily to prevent customers from getting the idea that it was only a copy service. In late 2006 the company rolled out a new branding for their printing and finishing service after finding that ImPress Print & Document Services was too sterile of a name. The current name for the printing department is OfficeMax ImPress.[26] As part of a strategic partnership with VistaPrint, announced in 2007, ImPress is an OfficeMax-branded web site for small business printing based on VistaPrint technologies.[27]

The furniture section of the retail stores is often marketed separately as FurnitureMax, though officially only a few stores have true FurnitureMax sections, characterized by much larger selections than normal OfficeMax stores. OfficeMax currently has over 1000 retail stores in the United States (including Puerto Rico) and 43 locations in Mexico, in addition to an online retailer in the United States. In October 2004, Boise Cascade completed its sale of its paper, building products, and timberland assets. In February 2008, Boise Cascade spun off its paper, packaging, newsprint and transportation operations, including OfficeMax, to a new company, Boise Inc.[28][29]

Boise Cascade, which bought OfficeMax in 2003, also owned the Cuban Electric Company before it was seized by the Cuban government. Boise Inc. is the largest property claimant in Cuba.[30]

In October 2008, OfficeMax began selling a limited selection of its products, mainly school supplies in Safeway stores nationwide, replacing rival office supply retailer Staples.

MaxPerks customer reward program

OfficeMax offers a customer reward program, called MaxPerks where customers can earn cash back for future purchases. There are two types of MaxPerks programs: MaxPerks for Business and MaxPerks for Teachers.[31]

The MaxPerks for Business program is intended for any customer. The MaxPerks for Teachers program is a reward program designed for teachers, where cardholders receive ten dollars for every 75 dollars they spend. This program also allows teachers to get extra school supply money by allowing them to give their MaxPerks number to their students, allowing them to receive benefits throughout the school year. In addition, teachers are allowed to purchase twice the limit for sales items.

As of January 1, 2010 OfficeMax's ink recycling program was revised limiting to 60 dollars in rewards per month for ink cartridges(compared to the former 30 dollars per week limit).

MaxAssurance

MaxAssurance is a service that OfficeMax offers on furniture, electronics and, computers. Notably useful for the purchase of printers, this service will cover accidental damage on behalf of the owner. The only things that MaxAssurance does not protect against are loss, theft, and intentional damage. MaxAssurance is also offered on a wide variety of products (including but not limited to): Cameras, Computers, Shredders, Printers and furniture. Also, many other products qualify for MaxAssurance such as GPS Units, Business Telephone Systems and Laminators.

On November 9, 2008, OfficeMax altered its MaxAssurance program to offer a wider range of pricing options specific to the type of product purchased.

Customers can purchase MaxAssurance at point of sale for their qualifying product. In addition, if the consumer wishes not to purchase the plan at that time they can opt to purchase it within a 14 day window. The plan does not have to be purchased with product in hand. Customers can register their plan via the MaxAasurance website for their new product.

Financial rebound

In early 2006, OfficeMax closed 110 under-performing domestic stores, and opened 70 new stores with the new award winning "Advantage" store layout.[32] The "Advantage" store design is designed to be more customer friendly and includes improvements in all major departments inside an OfficeMax store. The company plans to remodel most or all of its stores to the new Advantage layout.

OfficeMax ink refilling kiosk

Starting in 2005 and ending early 2006, OfficeMax tested a semi-automated ink refill station in their stores in the Chicago area. Customers could bring in old Hewlett-Packard, Lexmark, Dell, or Compaq ink cartridges, and have them tested and refilled for less than the cost of new cartridges. By July 2006, OfficeMax had outfitted all of their high profit stores with the ink refill machines. Due to the complexity of Canon cartridges, the OfficeMax Ink Kiosk is unable to refill them. This is mainly because Canon uses a colored dye in their cartridges, not ink. The electronic contacts are also digitally altered in such a way that the Ink Kiosk cannot read them.

In 2010, the ink refill program was reinstated and select stores were issued ink refill machines.

OfficeMax ink recycling program

In 2005, OfficeMax began accepting any empty HP, Dell, or Lexmark inkjet or toner cartridges in exchange for a free OfficeMax brand ream of paper, with a limit of five per customer, per day, or an option to take three dollars off their purchase. This was then changed in October 2006 due to many customers abusing the program. At that time, OfficeMax only offered the three dollar instore discount, with a limit of five, for only HP, Lexmark, Dell, and Canon. In the fall of 2007 Canon was no longer participating in the program. The cartridges were also required to be brand name.

In July 2008, OfficeMax restructured their ink recycling program. Customers will no longer receive an in store credit for cartridges returned. Customers bringing in qualifying empty ink cartridges will instead receive a three dollar reward to their MaxPerks account for up to ten cartridges and thirty dollars in rewards a week, similar to Staples's program.

On January 1, 2010, the program changed again, to take all "national brand" ink and toner cartridges, so long as the ink cartridges had a print head attached. Customers can recycle up to 20 cartridges per month.

In October of 2010, the program changed once again. Customers were able to recycle all Dell, Lexmark, and HP brand ink and toner cartridges, with the exception of HP numbers 02, 11, and 88. No other brands, including OfficeMax brand refurbished cartridges would be accepted. The limit of 20 cartridges per month remained the same.

Store Concepts

  • CopyMax
  • FurnitureMax
  • BatteryMax
  • OfficeMax PDQ
  • TriMax
  • ImPress

CTRL-Center In Store & Web-Based Services

OfficeMax launched a line of web-based services in 2007. Services are performed by trained CtrlCenter technicians and based within the United States. These services range from virus and spyware removal from a computer to the set-up and installation of a new computer. Customers can bring their desktop or laptop into any participating OfficeMax location for assistance. In addition, many stores will perform a free "PC Checkup" to determine optimal settings and hardware configurations

Services offered include both in-home and web-based PC restoration, wireless network setup, software and peripheral installation, online data backup, new PC setup and file transfer, and online training for popular office software titles.[33]

In 2010 OfficeMax started offering CTRL Center services in store to compete with in store services from Staples & Best Buy in select stores.

A Day Made Better

On October 2, 2007 OfficeMax in partnership with Adopt-A-Classroom surprised 1,000 teachers with a box of supplies worth about $1,200. The majority of the schools selected were Title 1 schools, in which 40% or more of the student body is subsidized with the free school lunch program. The teacher selected was nominated by the school's principal based on merit. The cause program has gone on to win national awards including the Peter Glen Award at the 2008 Retail Advertising & Marketing Association conference.

Back for its second year, in October 2008 OfficeMax surprised more than 1,200 teachers across the nation. Other new additions include celebrity involvement and the launch of a new website.

In 2011 OfficeMax announced a donation box, where customers can make their purchases, and allow their chosen items to be sent to a local school chosen by each store's general manager. [34]

Controversies

In 2005, OfficeMax was investigated by the U.S. Securities and Exchange Commission in regard to "accounting for vendor income." According to OfficeMax, the company had falsified $3.3 million in rebate claims owed by its suppliers. Six employees were fired in connection with the issue. In early November, 2007, the Securities and Exchange Commission completed the probe and recommended no enforcement action.[35]

In 2008 OfficeMax was targeted by protesters asking it to keep a promise that was made to protect indigenous rights. Logging in Canada’s Whiskey Jack Forest to supply the paper pulp industry is opposed by the Asubpeeschoseewagong First Nation people.[36]

On June 1, 2008, store employees were given word that the company would be undergoing a massive managerial restructuring. Assistant store manager positions in logistics and sales were merged into one position and all supervisor positions were eliminated. Fewer new positions were created with two key-carrying specialists, in furniture and technology, and a merchandising manager and/or operations supervisor in select stores. Store management (excluding store managers and the ImPress supervisor) were to re-apply and re-interview for the new positions, often receiving lower wages, in order to remain with the company. The company announced the layoffs of 2,700 employees on June 25, 2008.[37]

Going green

In spring 2008 OfficeMax started to sell recycled products for a company called TerraCycle. OfficeMax now carries trash and recycling cans, Eco binders, natural all purpose and window cleaners and, pencil cases. The products and packaging are made entirely from waste, reducing the amount of garbage going to landfills. OfficeMax offers and stocks more than 1,700 products with recycled content.[citation needed]

In the ImPress department customers can upgrade from 30 percent to 100 percent post-consumer paper for a limited time at no charge. All OfficeMax ImPress self-serve copy machines have been outfitted with "Think in Green" stickers to encourage customers to take advantage of this offer.

See also

References

  1. ^ OfficeMax Reports First Quarter 2011 Financial Results
  2. ^ "Fortune 500: Our Annual Ranking of America's Largest Companies". Fortune 500/CNN. July 2, 2011.
  3. ^ Laura Liebeck "OfficeMax, Office World to merge into one chain - Shakeout in office supply segment looms". Discount Store News. FindArticles.com. 18 Feb, 2011.
  4. ^ Laura Liebeck "K Mart support to spur OfficeMax expansion - office supply warehouse stores - K Mart's Fresh New Face". Discount Store News. FindArticles.com. 18 Feb, 2011.
  5. ^ "Kmart ups OfficeMax stake". Discount Store News. FindArticles.com. 18 Feb, 2011.
  6. ^ Laura Liebeck "OfficeMax moves headquarters; acquisitions help expansion". Discount Store News. FindArticles.com. 18 Feb, 2011.
  7. ^ "OfficeMax acquires BizMart; 3 major superstores remain". Discount Store News. FindArticles.com. 18 Feb, 2011.
  8. ^ "Kmart opens largest power center - multistore Kmart complex opens in Utica, Mich". Discount Store News. FindArticles.com. 18 Feb, 2011.
  9. ^ "Sports Authority OfficeMax shares on the block; Kmart spin-offs could raise $700M". Discount Store News. FindArticles.com. 18 Feb, 2011.
  10. ^ "Kmart reveals details of specialty chain stock sale". Discount Store News. FindArticles.com. 18 Feb, 2011.
  11. ^ Laura Liebeck "Super K opening lifts sagging Kmart spirits; board fails to resolve spin-off question - Super Kmart Center, Michigan". Discount Store News. FindArticles.com. 18 Feb, 2011.
  12. ^ Teresa Andreoli Feb, 2011. "Furniture: the next mass superstore star". Discount Store News. FindArticles.com.
  13. ^ Laura Liebeck "Deja vu: Kmart to remake itself; spin-offs will shift focus to core discount stores". Discount Store News. FindArticles.com. 18 Feb, 2011.
  14. ^ Richard Halverson "Mass market goes on line; Service Merchandise, OfficeMax tap cybersales - retailing on computer networks". Discount Store News. FindArticles.com. 18 Feb, 2011.
  15. ^ Jim Silver "Kmart to Sell OfficeMax Stake, Raising About $347.9 Million". Journal Record, The (Oklahoma City). FindArticles.com. 18 Feb, 2011.
  16. ^ "OfficeMax charges ahead with test of full-service battery kiosks: files suits against retailers for using 'Max' name - BatteryMax". Discount Store News. FindArticles.com. 18 Feb, 2011.
  17. ^ Laura Liebeck "OfficeMax sets overseas itinerary". Discount Store News. FindArticles.com. 18 Feb, 2011.
  18. ^ "OfficeMax plans California blitz - expansion". Discount Store News. FindArticles.com. 18 Feb, 2011.
  19. ^ "Office chains at work on international inroads and ancillary services - includes industry outlook - The DSN Top 200". Discount Store News. FindArticles.com. 18 Feb, 2011.
  20. ^ a b "Office superstore expansion in high gear". Discount Store News. FindArticles.com. 18 Feb, 2011.
  21. ^ "Office superstore chains plan 9 million sq. ft. of new space in '98". Discount Store News. FindArticles.com. 18 Feb, 2011.
  22. ^ "Office Supply Chains Foresee Continued Expansion". Discount Store News. FindArticles.com. 18 Feb, 2011.
  23. ^ "OfficeMax reveals plans at shareholders meeting". Discount Store News. FindArticles.com. 18 Feb, 2011.
  24. ^ Mike Troy "OfficeMax unveils new prototypes". Discount Store News. FindArticles.com. 18 Feb, 2011.
  25. ^ OfficeMax Enterprise Solutions
  26. ^ http://www.officemax.com/max/solutions/services/CopyMax/CopyMax.jsp
  27. ^ http://www.eventvestor.com/evp_event.php?eid=128966
  28. ^ http://www.bc.com/
  29. ^ http://www.boiseinc.com/
  30. ^ Musante, Kenneth (February 19, 2008). "How to profit from Castro's resignation". CNN. Retrieved May 20, 2010.
  31. ^ "OfficeMax MaxPerks Program". Retrieved 2007-12-18.
  32. ^ "OfficeMax: 10K Annual Report". Retrieved 2006-07-05. [dead link]
  33. ^ "OfficeMax Launches CTRL-Center, New Remote PC Tech Support Service". PRNewswire press release from OfficeMax. 2007-04-25.
  34. ^ http://www.adaymadebetter.com
  35. ^ OfficeMax Media Room - News Releases
  36. ^ "Protests Push OfficeMax to Keep Promise on Indigenous Rights". Common Dreams. 2008-01-30. Retrieved 2008-02-08. {{cite web}}: Cite has empty unknown parameter: |coauthors= (help)
  37. ^ OfficeMax Positions Eliminated
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