Office Depot 2001 Annual Report Download - page 21

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which also house sales offices, call centers and administrative offices. Our
CSCs perform warehousing and delivery services on behalf of all segments of
our business.
At the end of the third quarter of 1998, we operated 20 Office Depot and
10 Viking CSCs. At that time, we initiated, and later modified, plans to inte-
grate certain of our Viking and Office Depot warehouses, which were largely
completed during 2001. At the end of 2001, we operated 24 CSCs in the
United States. Once our integration is complete, we will operate 22 CSCs,
consisting of nine Office Depot facilities, two Viking facilities and 11 com-
bined facilities.
In January 1998, we introduced our Office Depot public Web site
(www.officedepot.com), offering our customers the convenience of shopping with
us on-line. In late August of 1998, when we merged with Viking, we also
acquired the Viking public Web site (www.vikingop.com). In 2001, when we ac-
quired 4Sure.com, we acquired the 4Sure.com Web sites (www.computers4sure.com
and www.solutions4sure.com) aimed at technology purchasers. We believe our
Internet business will provide significant future growth opportunities for our
BSG segment and our business as a whole based on the growth rates we have
experienced over the last three years.
Throughout 2001, Robert Keller was President of BSG. Mr. Keller has been
with our Company for four years in various executive capacities. Mr. Keller
reports to our Chairman and CEO, Bruce Nelson.
International Division
Our International Division sells office products and services in 16 countries
outside the United States and Canada through Office Depot retail stores,
Office Depottbrand and Viking Office Productstbrand direct mail catalogs
and Internet sites, and an Office Depot contract sales force. The international
direct marketing business was launched in 1990 under the Viking Office
Productstbrand with the establishment of operations in the United Kingdom.
We have expanded internationally in a variety of ways, including licensing
and joint venture agreements, acquisitions and the merger with Viking. Prior
to 1998, our international business was operated entirely through licensing
and joint venture agreements. In 1998, we merged with Viking, whose inter-
national operations were wholly-owned, and we subsequently acquired the
remaining 50% interest from our joint venture partner in France, bringing
our ownership to 100%. In early 1999, we acquired the interests of our joint
venture partner in Japan, bringing our ownership to 100%. During 2001, we
added the contract stationer Sands & McDougaleto our business in Australia.
In March 1999, we introduced our first international public Web site
(www.viking-direct.co.uk) for individuals and businesses in the United Kingdom.
Between 2000 and 2001, we introduced nine new public Web sites and one
contract Web site in the following countries: Germany (www.viking.de),
The Netherlands (www.vikingdirect.nl), Italy (www.vikingop.it), Australia
(www.vikingop.com.au), Japan (www.vikingop.co.jp and www.officedepot.co.jp),
France (www.vikingdirect.fr and www.officedepot.fr), Austria (www.vikingdirekt.at)
and the United Kingdom (bsdnet.officedepot.co.uk).
We launched our Office Depot contract business in the United Kingdom
in 2000 and began service in 2001 in three new countries—Ireland, The
Netherlands and France. This channel targets medium- to large-sized businesses
and offers personalized service through a dedicated sales force, individualized
pricing and overnight fulfillment, using our existing European logistics
infrastructure.
At the end of 2001, our International Division sold office products and
services through either wholly-owned operations, or through joint ventures
or licensing agreements, in Australia, Austria, Belgium, France, Germany,
Hungary, Ireland, Israel, Italy, Japan, Luxembourg, Mexico, The Netherlands,
Poland, Thailand and the United Kingdom. Seven of these countries served
retail customers through a total of 143 office supply stores; 39 stores were
wholly-owned. This compares to 132 stores in seven countries, 35 of which
were wholly-owned, at the end of 2000. We also had catalog and delivery
operations in 14 of these countries during 2001. International Division store
and CSC operations, including facilities operated through licensing and joint
venture agreements, for the last five years are detailed below. All years prior
to 1998 have been restated to include facilities operated by Viking prior to our
merger. Also, the number of CSCs has been restated to reflect two combined
store/CSC facilities that were previously classified as stores only.
Office Supply Store
Open at Open at
Beginning End
of Period Opened Closed of Period
1997 21 18 — 39
1998 39 48 — 87
1999 87 36 5 118
2000 118 19 5 132
2001 132 15 4 143
Customer Service Centers
Open at Open at
Beginning End
of Period Opened Closed of Period
1997 13 4 — 17
1998 17 2 1 18
1999 18 2 1 19
2000 19 — — 19
2001 19 5 1 23