Copyright 2008, Traffic World, Inc.
In the latest attempt to revive its troubled storefront division, FedEx is dropping the Kinko''s name and re-christening the brand as FedEx Office.
FedEx will take an $891 million fourth-quarter charge to make the change.
The company says the new name "better describes the wide range of services available at its retail centers and takes full advantage of the FedEx brand."
"Kinko''s was primarily a copy and print service provider when it was acquired in 2004," said Brian D. Philips, president and CEO of FedEx Office. "The name FedEx Office more accurately represents our broader role of providing superior information and services through our company-owned, digitally connected locations around the world."
Philips took charge of the unit in May, and the division''s senior management team was reduced and restructured to better fit in with the company''s strategy and to control costs. Earlier this year, the company reduced future capital commitments by slowing the rate of expansion from about 300 locations in fiscal year 2008 to about 70 in fiscal 2009.
That backward trend has been the combined company''s course since 2005, when it reported operating income of about $100 million - down to a bit more than $40 million in 2007.
The idea had been to bundle Kinko''s retail network with FedEx transportation services to create a comprehensive office for business people on the road and cash in on infrequent shippers who, says Navigo Consulting Group Principal Tim Sailor, offer a much higher yield. Such a network also would be used to consolidate FedEx drop-off and pickup locations.
Instead, analysts say, the result has been a kind of Franken-network, a patchwork of locations where Kinko''s and FedEx cultures clashed frequently.
Kinko''s was known as a more resourceful and independent operation that didn''t thrive under the more centralized FedEx corporate structure.
Sailor and others say FedEx has tried to market its way through the problems, trying to artificially create the kind of recognition that the UPS Store gained for offering one-stop shipping options.
FedEx says the latest changes at the newly named FedEx Office are the latest in a series of moves designed to more sharply focus the division on profitable core revenue growth and incremental shipping volume, which contributes about $1 billion of revenue annually to FedEx Express and FedEx Ground.