United Stationers

About United Stationers

Don't think that United Stationers is just another paper pusher. The company is a leading wholesale distributor of office supplies and equipment in North America, offering some 100,000 of its own and national brand products to more than 25,000 customers. Through subsidiaries United Stationers Supply (USS), Lagasse, and ORS Nasco, United Stationers – more... supplies such items as business machines, computer products and peripherals, janitorial supplies, and office products and furniture. It also offers office furniture for such markets as education and health care. United Stationers sells primarily to resellers through catalogs and over the Internet, as well as through its direct sales force.

Geographic Reach

Of the $5 billion in sales United Stationers rang up in 2011, $100 million was generated by its international operations.

Strategy

As part of its key merchandising strategy, United Stationers keeps its costs low through high-volume purchasing. It orders products from more than 1,000 manufacturers. Some 20% of the company's purchases were made from Hewlett-Packard in 2011. The company's largest customer, W.B. Mason Co., accounted for about 11% of 2011 sales.

To strengthen its foothold in product distribution, United Stationers has been acquiring the assets of its rivals. Most recently, the company bought privately-owned welding, safety, and industry products wholesaler O.K.I. Supply Co. for $90 million in late 2012. The Ohio-based firm joins the company's ORS Nasco business. Previously, the company's USS subsidiary acquired Denver-based MBS Dev, a software solutions provider to business products resellers for $15 million in early 2010. The purchase is expected to bolster the company's online merchandising and marketing capabilities.

United Stationers recently saw a shift in its executive suite. Richard Gochnauer retired as CEO of the company in May 2011, succeeded by P. Cody Phipps, the president and COO of United Stationers. Before joining the firm in 2003, Phipps was a partner with McKinsey & Company.

Financial Analysis

United Stationers' net sales increased by more than 3% to $5 billion in 2011, compared with $4.8 billion in 2010. Net income fell by more than 3% over the same period. The sales growth was driven by double-digit increases in sales of industrial and janitorial and breakroom supplies. Traditional office products eked out a 1.5% sales gain, while sales of technology products, which account for a third of the company's total, declined 2%. Office furniture sales fell nearly 7%. The sales growth was notable as the company lost its largest customer -- office supply retailer Staples. (Staples accounted for about 11% of its 2010 sales.) Staples acquired office products wholesaler Corporate Express (a key competitor of United Stationers) in 2008.

Ownership

FMR is the company's largest shareholder with nearly 15% of the company's shares. Neuberger Berman Group owns about 12% of United Stationers. – less

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