Office Depot 2000 Annual Report Download - page 12

and efficiency of our U.S. warehouses. We are also engaged in warehouse
consolidation and integration activities that should improve productivity, eliminate
redundancies and cut labor expenses.
In addition, we have taken a number of actions to improve the operating performance
of our contract sales business. After a close evaluation of our contract operations,
we have trimmed our sales force by ten percent, and we are in the process of
consolidating 24 Office Depot call centers into seven upgraded and technologically
advanced customer service centers.
We have also carefully reviewed the value of our holdings in a number of Internet
companies, most of which are strategic marketing partners with Office Depot. In the
fourth quarter, we reduced the value on our books of certain Internet holdings to
better reflect their value relative to current economic conditions, today’s market for
Internet companies and the changing environment for investments in these kinds of
businesses. We also wrote down a portion of goodwill related to our 1999 acquisition
of the remaining 50 percent ownership interest in our Japanese operations.
It is clear that Office Depot remains aggressively focused on finding methods to
accelerate the growth of our businesses and is highly committed to executing these
methods. In 2001, we will make significant incremental investments to improve the
customer experience in our North American Retail stores and in all other channels in
which we sell. We will exploit new ways to capitalize on our already strong presence
in the international arena and maximize our status as the clear industry e-commerce
leader to expand our rapidly growing Internet business. We will continue to seek cost
savings in our warehouse operations without sacrificing service levels. We will also
seek to grow our rapidly expanding international business.
In addition, we are committed to improving our relationships with the financial
community. After a difficult 2000, we are working diligently to provide meaningful,
informative and consistent guidance to rebuild our credibility with our shareholders,
analysts and others in the investment community.
In short, we are making every effort at Office Depot to ensure that our Company
becomes a more compelling place to invest. We firmly believe that if we serve our
customers and shareholders better, build stronger supplier relationships and make
Office Depot a more rewarding place for our people, we will be able to recapture our
long-held position as our industry’s leader—and ultimately generate a superior return
on investment for our valued shareholders.
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