Office Depot widens European footprint with acquisition in Sweden

LONDON — Seeking a greater presence overseas, Office Depot announced plans Thursday to expand into Sweden through the acquisition of one of the region's largest office supply companies, AGE Kontor & Data AB.

The move illustrates just how seriously the Delray Beach, Fla.-based company is taking its efforts to boost international operations, which represent a significant growth opportunity.

With the latest acquisition, the company seeks to establish a firm foothold in the Nordic market, one of the few large markets in Europe in which the company doesn't have a presence.

"Office Depot wanted to establish a presence in Sweden and the Nordic market as part of the overall growth strategy for our European business," said Dirk Collin, managing director for Office Depot Europe.

He said that AGE has been Office Depot's partner in Sweden for more than four years and that "their management experience, customer base, and knowledgeable sales force are perfect complements to Office Depot's international organization."

The acquisition adds 13 retail locations and a contract business to Office Depot's global footprint.

Due to ongoing U.S. economic turmoil, both Office Depot and its larger rival Staples Inc. face a slowdown in demand as fewer companies are willing to shell out funds for chairs, desks, and computer supplies.

With U.S. retail sales of office supplies slumping, Office Depot reported in late July a $2 million loss for the second quarter, compared to earnings of $106 million in the same period of 2007.

The company said it would cut an undisclosed number of corporate jobs and slow new-store openings to help bolster results.

But the international division reported a sales increase of 13 percent in the second quarter to $1.1 billion compared with the same period last year.

It's no surprise that both Office Depot and Staples have their eyes on Europe.

Founded in 1947, the profitable AGE has grown steadily to become the top office supply company in the Stockholm region as well as a leader in the small- and medium-business segment throughout Sweden.

The Stockholm-based company provides more than 6,500 national and private brand products and solutions including office supplies, office technology, printing and furniture.

Office Depot's acquisition of AGE is the latest in a string of acquisitions designed to conquer markets across the Atlantic.

Already, the company has operations throughout Europe, including more than 100 retail locations.

In 2003, Office Depot acquired Guilbert, a leading contract sales and e-commerce stationer based in France.

In 2006, it acquired Papirius, one of the largest business-to-business suppliers of office products and services in Eastern Europe.

In addition, Office Depot launched its Foray product line in Europe earlier this year, a step towards globalizing Office Depot's brands.

Shelley Emling is a London correspondent for Cox Newspapers.