OFFICE
DEPOT
NEWS RELEASE
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Contact: Eileen H. Dunn
Vice President, Investor Relations/Public Relations
561/438-4930
[email protected]
OFFICE DEPOT ANNOUNCES PLANS TO UPGRADE ITS
CUSTOMER SERVICE ORGANIZATION
o Company Plans to Expand 7 Facilities and Consolidate 24;
o Goal of Rationalization to Leverage Resources More
Efficiently and Increase Customer Service Levels;
o New Technology to Improve Call Center Experience for
Customers
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DELRAY BEACH, Fla.--Nov. 6, 2000--Office Depot, Inc. (NYSE:ODP - news), the
world's largest seller of office products, which earlier today made three
announcements relating to its business, issued the following additional details
on the reorganization of its call center operations.
The Company announced earlier today that, while its overall business review
continues, it has completed the review of its Office Depot U.S. call center
operations. As a result of this review, the Company believes that there is
considerable opportunity to enhance the customer service experience by more
efficiently using existing resources, upgrading technology and consolidating 24
existing Office Depot call center operations into seven expanded customer
service centers.
Commenting on the call center reorganization Nelson said, "Making Office Depot a
more compelling place to shop is one of my most important priorities. This
consolidation of our call centers will enhance our ability to impress customers
so much that they will want to buy from us again. Currently, commercial,
Internet and contract customers who call into Office Depot are directed to
discrete call centers that may or may not have the capacity or readily available
information to handle the call promptly and correctly. This all too often
results in increased call waiting and call times and reduces customer
satisfaction.
<PAGE>
"With our call center reorganization and related technology investments, we will
offer a faster, more robust 24x7, world-class shopping experience to busy
business customers who want a quick, easy way of ordering their office products
and services. At the same time, we can increase productivity and efficiency
levels and reduce overall customer service costs.
"While the overall review of our total business is not yet completed, given the
impact these changes will have on our organization, we felt it was appropriate
to disclose the changes at this time in order to adequately plan for the
consolidations and to mitigate the disruption to our employees' lives as much as
possible. With any change like this one, our number one priority is to our
people and the impact this will have on the overall organization," Nelson
concluded.
Call center customer service at Office Depot is currently provided by call
centers comprising 1,400 representatives, located at 24 domestic facilities,
plus 630 representatives at five Viking locations. Under the plan announced
today, the total number of customer service call center representatives will
remain about the same, but certain key locations will be expanded while others
are scaled back or closed. The net result will rationalize the current 24 call
center locations into 7 expanded Office Depot facilities. None of the five U.S.
Viking call center operations will be affected by this consolidation, although
existing office space and call center capacity in the Viking headquarters in
Torrance, CA will now be used as the location for one of the seven upgraded
Office Depot facilities.
As a result of the call center reorganization, the Company will record a $2
million fourth quarter charge for severance and asset disposal costs. Beginning
in the fourth quarter, the Company will also incur expenses totaling $4 million
over the next twelve months, primarily to cover employee transition-related
activities. Upgrading the technology capabilities of the expanded Office Depot
facilities will require a $22 million capital investment, focused on
computer-telephony systems (CTI). When completed, the Company will have the
ability to provide improved customer service without increasing its annual
operating costs. Moreover, the Company expects to drive sales and further
leverage its cost structure by enabling the call center to handle outbound sales
activity.
Office Depot's technology investment in computer-telephony integration (CTI)
will enable the company to monitor incoming calls across its entire system
nationwide and to identify the best location to handle each call. The system
will automatically consider factors such as average hold times in each location,
number of calls currently in queue, and skills required to handle the call that
is waiting. The new technology also will tie telephones directly to a computer
so, if the caller's phone number is recognized, customer account information
will automatically appear on the account representative's computer screen
without further prompting. Representatives will also be alerted to
customer-specific business rules so that customers may be served more quickly
and effectively.
The seven upgraded and expanded Office Depot call centers will be in Cincinnati,
OH; Delray Beach, FL; Fremont, CA; Norcross, GA; Signal Hill, CA; Torrance, CA;
and Westhampton, NJ. The seventeen closing locations will transfer their call
volume to one of the upgraded facilities as part of the consolidation of
facilities and resources.
<PAGE>
The seventeen Office Depot call center facilities to be closed or phased out are
in Charlotte, NC; Chicago, IL; Colorado Springs, CO; Dallas, TX; Dayton, OH;
Denver, CO; Detroit, MI; Grand Rapids, MI; Houston, TX; Lawrenceville, GA;
Minneapolis, MN; New Orleans, LA; Orlando, FL; Phoenix, AZ; Sacramento, CA; San
Diego, CA and Seattle, WA. The migration of calls is scheduled to begin in March
2001, and is expected to be completed by August 2001. Most of these affected
facilities, in addition to warehousing and distribution, also serve as sales
offices for our contract sales force and as a result will not be closed.
About Office Depot
As of September 23, 2000, the Company operated 863 office supply superstores in
the United States and Canada, in addition to a national business-to-business
delivery network supported by 29 delivery centers, more than 60 local sales
offices and seven regional call centers. Furthermore, the Company owned and
operated 28 office supply stores in France and seven stores in Japan; had mail
order and delivery operations in 14 countries outside of the United States and
Canada; and under joint venture and licensing agreements, had 91 additional
stores operating under the Office Depot name in six other foreign countries. The
Company also operates an award-winning U.S. Office Depot brand Internet Web site
at www.officedepot.com where customers can access Office Depot's low competitive
prices seven days a week, twenty-four hours a day, and it operates
www.officedepot.co.jp in Japan as well as Viking brand Web sites at
www.vikingop.com in the United States, www.viking-direct.co.uk in the United
Kingdom, www.viking.de in Germany, www.vikingdirect.nl in The Netherlands,
www.vikingop.it in Italy, www.vikingop.com.au in Australia, www.vikingop.co.jp
in Japan and www.vikingdirect.fr in France. Office Depot's common stock is
traded on the New York Stock Exchange under the symbol ODP and is included in
the S&P 500 Index.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS: Except for historical
information, the matters discussed in this press release are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995, as amended. Forward-looking statements, including projections and
anticipated levels of performance, involve risks and uncertainties which may
cause actual results to differ materially from those discussed herein. These
risks and uncertainties are detailed from time to time by Office Depot in its
filings with the United States Securities and Exchange Commission, including
without limitation its most recent filing on Form 10-K, filed in March, 2000 and
subsequent 10-Q filings, including our most recent 10-Q, filed on October 31,
2000. You are strongly urged to review such filings for a more detailed
discussion of such risks and uncertainties. The Company's SEC filings are
readily obtainable at no charge at www.sec.gov, www.10kwizard.com and at
www.freeEDGAR.com as well as on a number of other commercial Web sites.
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