OfficeMax sets overseas itinerary

Discount Store News, May 6, 1996 by Laura Liebeck

SHAKER HEIGHTS, OHIO -- OfficeMax's new international initative will get underway in Mexico in June, and will be followed by a major incursion into Asia in 1997.

The 486-unit retailer will open its first two Mexican OfficeMax stores under a partnership arrangement with Grupo OpriMax, a newly organized company created to run the Mexican operation, said Michael Feuer, chairman and ceo. The Mexican partners are an assortment of wealthy business families with varied interests. Feuer said he expects to have five to seven OfficeMax stores in Mexico within the first 12 months of operation, and a total of 50 eventually.

Beginning in 1997, OfficeMax expects to begin a push into Asia, under what Feuer calls "a major initiative."

"We're looking to create OfficeMax in Asia like we did in the United States; Asia has more opportunities. We've been working on this for two years. We're way beyond the development stages," Feuer declared. Negotiations with potential partners is still ongoing.

OfficeMax plans to open hundreds of retail stores throughout Asia--200 in Japan alone--plus units in Thailand, Singapore, Hong Kong and various neighboring countries. The office supplies retailer also has begun looking at China, but store openings there are still a few years away, he added.

OfficeMax's plan, Feuer explained, is to expand internationally, but to keep the company's financial exposure to a minimum during the start-up stages.

Initially, OfficeMax will own less than 20% of the new stores in its international portfolio and then "ratchet it up to 50% to 51% so there won't be a big earnings hit," Feuer said.

At home, the office supplies retailer will open 80 new stores this year, and remodel 150 older units to the company's newest prototype, called Version 5.0. The prototype features low fixtures in the front of the store for computers and assorted business equipment, which improve sight lines and customer access to the products.

Also slated for 1996 are:

* 65 FurnitureMax stores;

* 65 CopyMax locations;

* At least 15 TriMax Super Centers;

* At least five new delivery centers for a total of 17 by yearend.

In addition, OfficeMax just launched a $23 million expansion of its headquarters facility in Shaker Heights, a Cleveland suburb, which will add a four-story office building with 100,000 sq. ft. that can house 1,200 employees. Corporate headquarters now has 600 workers on-site and 1,500 in the greater Cleveland area.

In recent months, OfficeMax launched a direct importing program of commodity items from Asia, as well as InstallMax, a computer and business equipment installation program with Xerox.

OfficeMax has grown big enough to make the Fortune 500 list this year, settling in at 483rd place.

In 1995, OfficeMax reported sales $2.54 billion, a 38.1% gain over 1994. Operating income for the year was $86.3 million, 55.1% greater than the previous year; comp store sales rose 16.7% on top of the 17% gain recorded in 1994.

During 1995, OfficeMax opened 80 new stores and initiated its rollout of the FurnitureMax furniture store-within-a-store format. It also launched CopyMax copy centers plus the mini CopyMax program, and initiated TriMax, its 3-in-1 format that marries a typical OfficeMax store with FurnitureMax and CopyMax. And the chain opened its third catalog order center, developed a national TV ad campaign starring "Mr. StickMax" who took the retailer's "Taking it to the Max" theme to a wide audience, and grew its management team. The most recent changes in management include the naming of John Martin, previously executive vice president of store operations, in March to president of retail stores, and John Belknap, a financial expert, as the company's chief financial officer.