Office Depot Expanding Private Brand in Europe

LONDON — Seeking growth overseas, Office Depot announced the launch of its Foray product line in Europe on Wednesday.

The launch by the Delray Beach, Fla.-based chain is the first in a series of product additions designed to bring a wider assortment of Office Depot's exclusive products to European customers.

The Foray line includes a wide range of basic office supplies such as pens, highlighters and writing pads.

"The European introduction of the Foray writing instruments allows global consistency that benefits our multinational business customers," said Peter De Coninck, director of private brand and direct import for Europe.

He said the introduction of Foray is a step towards globalizing Office Depot's brands.

"This is the first time we've globalized a brand available in the United States," De Coninck said. "But there will be more brands implemented in Europe in the future.

"Of course we are always trying to increase sales," he said.

The move is part of a growing focus on the company's international division, which represents a significant growth opportunity.

In November, Office Depot announced a drop in third-quarter profit to $117.5 million, a 9 percent fall from a year earlier.

The company blamed a weak housing market in Florida and California, where one-fourth of its retail business is concentrated.

But international sales climbed 13 percent from the year-ago quarter, although the company still expressed dissatisfaction with the international division's overall performance.

Anthony Chukumba, an analyst at FTN Midwest Securities Corp. based in New York, said it's not surprising that Office Depot is trying to increase penetration of its private label products.

"About 20 to 30 percent of their sales is private label products available either under the Office Depot name or names like Foray," he said. "The private label products on average tend to generate higher profit margins than their various other products."

Chukumba said that both Office Depot and rival Staples boast fairly robust European businesses and both are looking to expand internationally.

"This is particularly important as growth in the United States slows and the market becomes more saturated here," he said.

Office Depot's annual sales total more than $15 billion, and the chain sells to customers in 43 countries. Office Depot has more than 100 retail locations in Europe.

Office Depot is the second largest office-supplies retailer after Framingham, Mass.-based Staples Inc.

Office Depot launched its Foray line in the United States in 2004. It has been updated and redesigned for its European debut with vibrant colors and new packaging.