OfficeMax Hires New Merchandising Head From Bygone Competitor
March 15 2012 - 7:05PM
Dow Jones News
OfficeMax Inc. (OMX) said Thursday it hired a new merchandising
chief who previously led merchandising at another office-supplies
company, one that was key to the growth of OfficeMax's biggest
competitor.
Ronald Lalla, who will become OfficeMax's executive vice
president and chief merchandising officer Monday, previously worked
for Corporate Express, which Staples Inc. (SPLS) bought in
2008.
Valued at $4.8 billion, the Corporate Express deal was Staples's
largest takeover. It boosted the company's sales by about 40% and
catapulted Staples to lead the market handling supplies orders for
big businesses. Staples now has $25.02 billion in annual sales
versus OfficeMax's $7.1 billion.
OfficeMax is bringing Lalla back to the office-supplies
retailing sector after he most recently worked at closely held Katz
Group, a big pharmacy operator in Canada. There, he served as chief
merchandising officer and chief technology officer. Lalla also held
several leadership positions in merchandising, store operations and
finance over the course of more than 10 years at Kmart Corp., now
part of Sears Holdings Corp. (SHLD).
His arrival at OfficeMax comes as the struggling company is
making strategic shifts toward merchandising and other areas of its
business. The company recalibrated its merchandising and signage
programs to emphasize value after a weak back-to-school season last
year. It also hired a new person to oversee technology products
recently, an area where OfficeMax has stumbled.
Lalla is the most recent of many new executives to be added to
OfficeMax's management ranks. Earlier this month, the company hired
a new head of its contract business, and in the last year it has
named new heads of its retail, human resources and e-commerce
divisions.
Chief Executive Ravi Saligram has said strengthening OfficeMax's
management team was part of the company's rebuilding efforts, to
ready itself for a new strategic plan. That plan includes closing
15 to 20 U.S. stores per year for the next five years, with
accelerated closures in the current year. OfficeMax also is trying
mitigate its least profitable contract accounts, make its supply
chain more efficient, rein in promotional spending and stress its
high-margin private brands.
The company believes such moves set it up for rising profits
this year. Sales weakness at OfficeMax has stretched back about
four years, with the most recent quarter being only the second
quarter to show revenue growth in the last 17.
Saligram said Thursday that as OfficeMax develops new models and
retail formats and enters new categories, Lalla's "track record of
driving innovations in both the retail and business-to-business
office-products sectors will be an asset."
Shares closed up 0.9% at $5.50 and weren't active after
hours.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com
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