Napa Auto Parts 2003 Annual Report Download - page 10

S.P. Richards Company is one of North America’s leading business
products wholesalers, distributing over 30,000 items to more than
7,000 resellers in the United States and Canada. From a network
of 44 distribution centers, the Company supplies it customers with
an array of business products including filing supplies, office
furniture, janitorial and breakroom supplies, computer supplies
and accessories, consumer electronics, school supplies, business
machines, writing instruments, desk accessories, paper products
and healthcare supplies.
The Company also provides a wide range of specialized services
designed to meet the needs of its diverse customer base. S.P.
Richards’ logistical support and access to a broad spectrum of
products compliment the efforts of their large contract stationer,
national office supply superstore and mail order customers.
Many resellers are also able to avoid the significant investment
typically required to expand their service area and provide
nation-wide coverage to their national accounts by relying on
S.P. Richards' logistical capabilities. For the independent reseller,
the Company’s comprehensive array of marketing programs is
another valuable service that distinguishes S.P. Richards from
its competitors.
GROWTH IN 2003
S.P. Richards recorded sales increases each quarter in 2003 and
closed the year with revenues up over 4% compared to last year.
Our growth was the result of increased sales of our core business
products and especially strong sales at our Horizon and Canadian
subsidiaries. The slight shift in product mix associated with our
sales growth as well as general market conditions pressured
our margins down for the year, but we are confident that our
growth strategy will correct this trend.
Horizon, which distributes computer supplies, accessories and
business machines to resellers in the U.S. and Western Canada,
helped fuel our 2003 sales growth. Horizon's sales were aided by
product expansion, new distribution outlets, and sales from new
business won after a major competitor in the computer supplies
segment ceased operations during the year.
S.P. Richards Canada also continued its strong sales growth,
distributing a line of more than 20,000 office supply and
furniture products from locations in Vancouver, Calgary,
Winnipeg, and Toronto.
EXPANDED PRODUCT OFFERING
S.P. Richards delivers a broad range of products from more
than 350 leading business product manufacturers. During 2003,
we continued the careful expansion of our offerings to assist
resellers in becoming the single source solution for their
customers’ business product needs. Opportunities to further
expand categories such as janitorial products, breakroom supplies,
and school supplies have resulted in additional growth. Among
our new offerings is a line of healthcare products that supports
resellers in health and medical related businesses. This new line
includes exam room supplies such as gloves, paper, tape, cleaners,
thermometers and stethoscopes and our primary customer
targets are physicians’ offices, dentists, health clubs and schools.
In addition, we added the Lorell proprietary line of office
furniture, providing a new value alternative for customers.
Lorell joins our existing proprietary product family of Sparco
office supply basics, Compucessory computer accessories,
Nature Saver recycled paper products, and Elite Image new
and remanufactured toner cartridges.
MARKETING AND DEALER SERVICES
S.P. Richards’ marketing programs and dealer services are designed
to help the Company and its resellers capture new business,
grow existing business, and improve overall profitability.
Among the programs we enhanced last year are:
•SPR Advantage Program, which provides a variety of services
for the independent resellers, helping them compete more
effectively.
•USA Express Drop-ship Program, which increases resellers’
national sales coverage.
•Enhanced Catalog Program, which now includes our General
Line Catalog of 23,000 SKUs; Matrix SP Catalog, the industry’s
first consumer sale-priced full line catalog for independent
resellers; Select 2500 Catalog, bar coded to leverage the latest
scanning technology; School Supply Catalog, created to help
develop education sector business; and our Furniture Catalog,
redesigned with enhanced photography and layout features.
•New WorkSmart Series, which promotes our resellers as single
source solutions for furniture, computer supplies, and
cleaning supplies.
•SPR Premium Program, which nurtures customer loyalty with
a selection of affordable premiums.
•The SPARC Program, (The SPR Penetration, Acquisition, and
Retention Center), a marketing support library for personalized
communications and direct mail.
•2004 Dealer Capabilities CD, which contains templates and
tools for print and multimedia presentations.
•A National Delivery and Set-up Program, which enables
resellers to provide nationwide fulfillment of furniture orders.
•Internet Dealer Services, which includes access to key account
information and inventory levels, pricing, downloadable
8
OFFICE PRODUCTS GROUP
NET SALES
in billions of dollars
OFFICE PRODUCTS GROUP
17%
NET SALES BY
SEGMENT OF GPC
99 00 01 02 03
1.34 1.38 1.40 1.46
1.22