Office Depot Drops Viking Brand, Catalog in U.S.
Office Depot will eliminate its Viking brand in the United States and consolidate its Viking and Office Depot catalogs into one as part of a restructuring that will cost $82.2 million. The company also said yesterday that it will close 16 stores in North America and 11 overseas.In the consolidation, Office Depot, Delray Beach, FL, will dispose of its Viking-unique inventory and eliminate the need for two warehouses. It also said it will reorganize certain warehouse staffing functions, consolidate call centers and relocate some sales offices to available space in retail locations.
The catalog will operate under Office Depot's North American Business Services Division. Office Depot said it expects to complete the process by the end of 2005 or early 2006. The company said it has no plans to consolidate the Viking and Office Depot brands in Europe because of Viking's loyal customer base there. Office Depot acquired Viking in 1998 for $3 billion.
The company also said it will record charges of $80.1 million before taxes in the third quarter because of poor returns at stores it bought from Toys 'R' Us last year. Office Depot bought 124 Toys 'R' Us stores in March 2004 for $197 million, with plans to turn 50 of them into Office Depot stores and sell the rest. It said in its SEC filing that it still has 16 stores to dispose of.
Office Depot has operations in 23 countries, and its annual sales are nearly $14 billion.
