Office Depot 2011 Annual Report Download - page 3

PART I
Item 1. Business.
Office Depot, Inc. is a global supplier of office products and services. The company was incorporated in
Delaware in 1986 with the opening of our first retail store in Fort Lauderdale, Florida. In fiscal year 2011, we
sold $11.5 billion of products and services to consumers and businesses of all sizes through our three business
segments: North American Retail Division, North American Business Solutions Division and International
Division. Sales are processed through multiple channels, consisting of office supply stores, a contract sales force,
an outbound telephone account management sales force, internet sites, direct marketing catalogs and call centers,
all supported by our network of supply chain facilities and delivery operations.
Additional information regarding our business segments is presented below and in Management’s Discussion and
Analysis of Financial Condition and Results of Operations (“MD&A”) and, along with financial information
about geographic areas, in Note O — Segment Information of Notes to Consolidated Financial Statements
located elsewhere in this Annual Report on Form 10-K.
North American Retail Division
Our North American Retail Division sells a broad assortment of merchandise through our chain of office supply
stores throughout the United States. We currently offer general office supplies, computer supplies, business
machines and related supplies, and office furniture from national brands as well as our own brands. See the
Merchandising section below for additional product information. Our stores also contain a Copy & Print DepotTM
offering printing, reproduction, mailing, shipping, and other services and we maintain nationwide availability of
a PC support and network installation service that provides our customers with in-home, in-office and in-store
support for their technology needs.
Our retail stores are designed to provide a positive shopping experience for the customer. We strive to optimize
visual presentation, product placement, shelf capacity and in-stock positions. Our goal is to maintain sufficient
inventory in the stores to satisfy current and near-term customer needs, while controlling the overall working
capital invested in inventory.
We generally lease our retail stores in facilities that currently average over 20,000 square feet. In recent years,
however, our new, relocated, and remodeled stores have been targeted to be approximately 5,000 to 15,000
square feet, depending on the needs in the local market. At the end of 2011, we had eight locations in the smaller
store formats of approximately 5,000 square feet. These stores carry approximately 4,800 to 5,000 stock keeping
units, or SKUs, providing substantial product offerings to our customers, while lowering our facility and
inventory costs.
At the end of 2011, our North American Retail Division operated 1,131 office supply stores throughout the U.S.
The largest concentration of our retail stores is in California, Texas and Florida, but we have broad representation
across North America. The count of open stores may include locations temporarily closed for remodels or other
factors. Store opening and closing activity for the last three years has been as follows:
Open at
Beginning
of Period Opened Closed
Open at
End
of Period Relocated
2009 ................................... 1,267 6 121 1,152 6
2010 ................................... 1,152 17 22 1,147 6
2011 ................................... 1,147 9 25 1,131 15
In recent years we have consolidated our supply chain network to utilize existing distribution centers (“DCs”) to
meet the needs of both our retail stores and our North American Business Solutions customers. See the North
American supply chain discussion below for additional information.
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