OfficeMax 2008 Annual Report Download - page 2
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To our shareholders
Dear Shareholders,
The past year was an historic year—one that was characterized by a rapidly deteriorating economic environment
and unprecedented volatility in the global financial markets. For OfficeMax, 2008 was a time to learn, adjust, and
most importantly persevere as we focused on pursuing a strategy to address near-term challenges while also positioning
the Company for long-term success.
Like many of our competitors, OfficeMax experienced declining year-over-year sales in 2008 due to weaker customer demand as well as our
own deliberate focus on profitable sales in our Contract business and our pursuit of appropriate promotional strategies in our Retail business.
Additionally, reduced sales volumes resulted in deleveraging of costs and lower net income on a year-over-year basis.
In difficult times, we believe it is critical to focus on managing what is within our control and identifying areas of opportunity to improve the
business. In response to the downturn in the economy, we continued to create cost efficiencies across our business to improve our
productivity and drive differentiation in our product and service offerings. We are confident that our initiatives are aiding us in addressing
near-term challenges, strengthening our company and better positioning OfficeMax for long-term growth.
Some of the critical actions we took in 2008 to emerge as a stronger company, positioned for growth, once the economy improves included:
and total solution to manage their costs beyond traditional office supplies, including furniture, technology, and digital print.
our multinational customers with a broader geographical coverage.
Additionally, we took steps that helped us refine our operations, increase cost efficiencies and preserve capital. To that end, our supply chain
team reduced delivery and store fulfillment operating costs even as we incurred significant increases in fuel costs. As a result of prudent
purchasing decisions by our merchandising and inventory management teams and effective collaboration with our suppliers, we generated
efficiencies and lowered inventory levels at our stores and customer fulfillment centers. We also reorganized our retail store management to
lessen overlap and reallocate payroll to key selling positions, and we reduced corporate staff and field management positions. Further, we
suspended cash dividend payments on the Company's common stock and rapidly adjusted our real estate program to better accommodate
weaker near-term industry growth. Many of these were difficult, but necessary, decisions made in order to remain competitive.
As we look forward, we continue to monitor our business very closely and are making appropriate adjustments on a real-time basis.
Currently, we do not plan to have net store growth and we are not planning additional store remodels until we see more favorable economic
conditions. We will remain highly focused on generating cash flow and managing capital prudently in order to maintain flexibility and
preserve our competitive advantage.
in this difficult environment, ensure we are ahead of the curve and better position OfficeMax for long-term growth in order to maximize
shareholder value. You can be assured that sustainable viability is as important to us as it is to all of our stakeholders.
Our more than 30,000 OfficeMax associates worldwide continue to demonstrate their hard work and dedication to servicing our customers.
I would like to thank our associates, customers, shareholders and other stakeholders for their support. We look forward to updating you on
our progress during 2009.
Sincerely,
Sam Duncan
Chairman and Chief Executive Officer
March 2009