Office Depot

At Office Depot, we strive to be a compelling place to work, shop and invest. We maintain an unwavering commitment to creating an inclusive environment throughout our company where all people are valued and respected for their unique perspectives, contributions, beliefs and cultural heritage. F. Patrick Sher and two partners found Office Depot, Inc. in Boca Raton, Florida, and open their first store in Fort Lauderdale. Office Depot acquires Office Club, Inc. and its 59 stores, mostly in California. Company acquires Canadian firm HQ Office International, Inc. in first move outside the United States. Federal Trade Commission blocks proposed acquisition of Office Depot by Staples, Inc. on antitrust grounds. Company's first web site, www.officedepot.com, is launched; direct-mail marketer Viking Office Products, Inc. is acquired. Major restructuring involves the closure of 70 stores and an exit from several markets. Office Depot acquires the French firm Guilbert S.A., a leading European contract stationer. Along with rival companies Staples and Office Club, Inc., Office Depot was a pioneer in the field of office supplies discount retail. The three companies were founded within months of each other in 1986 in three different corners of the United States--Office Depot in Florida, Staples in Massachusetts, and Office Club in California. All of them saw opportunities in selling office supplies to small businesses at bulk discount rates that had previously been the privilege of larger companies. Since small businesses had never purchased supplies in quantities large enough to receive bulk discounts, they had been at the mercy of conventional retailers who, in the absence of price competition, could sell at manufacturer's suggested retail prices and take markups of as much as 100 percent. Buying directly from manufacturers instead of wholesalers and keeping overhead low, a discount retailer could offer goods from 20 to 75 percent off of full retail. Another trend that proved advantageous for these three companies was the advent of warehouse-style discount retailers in the 1980s; what Price Club had done for general merchandise and what Circuit City had done for consumer electronics, Office Depot, Office Club, and Staples sought to do for ballpoint pens and legal pads. Office Depot was founded in Boca Raton, Florida, by entrepreneur F. Patrick Sher and two partners, Jack Kopkin and Stephen Dougherty. The company opened its first retail store in Fort Lauderdale in October 1986, and it proved successful enough that two more Office Depot stores appeared in Florida by the end of the year. The company continued to grow rapidly; in 1987 it opened seven more stores in Florida and Georgia and sales topped $33 million. Sher did not have long to savor his success, however, for he died of leukemia scarcely a year after his first store had opened. He was succeeded as CEO by David Fuente, an experienced retail executive whom Office Depot lured away from Sherwin-Williams, where he had been president of the paint stores division. Office Depot gained the distinction of being the first of the three original discount chains to turn a profit for a period of four consecutive quarters, which it did during the last two quarters of 1988 and the first two of 1989. The company achieved its success with stores that resembled nothing so much as warehouses. Their decor was functional and unassuming, in a style described by a reporter for Fortune as "plain pipe rack," with merchandise stacked floor-to-ceiling on steel shelves. As David Fuente explained it, "Customers pick only from the first six feet of 'shelf' space anyway. So we use the area above 'for storage.'" By 1989, Office Depot stores were averaging $150,000 in sales per week. Of course, lack of concern for the aesthetics of interior design characterized the company's competitors, as well. Office Depot held an edge in that commercial rents were lower in the South than elsewhere in the United States