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Office Depot makes Middle East franchise move

Leading US business supplies retailer signs MH Alshaya as GCC franchise operator

Office Depot, the $15 billion retailer of office equipment, including consumables and electronics, will bring its brand to the Middle East after striking its first franchise agreement in the region.

The company has signed a deal with M.H. Alshaya to sell office products and services under the Office Depot moniker. Alshaya has been awarded the franchise rights for all six of the GCC countries, with the first four stores scheduled to open in Kuwait City and Dubai this year.

“Office Depot understands the importance of developing a retail business in the Middle East and is partnering with a very experienced company such as Alshaya,” stated Ernst Wessel, VP international franchise development at the retailer. “We believe that the Office Depot business is particularly suitable and attractive as a franchising concept for certain territories and I look forward to talking with other potential partners.”

Office Depot is a renowned name in the US and parts of Europe, and boasts a worldwide store network that exceeds 1,700 outlets. Although it specialises in the sale of office furniture and stationary, it potentially represents more competition for the Gulf IT retail channel as it also sells large quantities of printing supplies and computing equipment.

Expansion in the Middle East comes at a time when the company is finding the going tough in its home market. Back in October it announced plans to close 112 under-performing stores throughout North America and reduced the number of store openings in 2009 to 20, down from an earlier estimate of 40.

In its last set of quarterly results, the company slipped to a net loss of $7m as worldwide sales tumbled 7% to $3.7 billion compared with the same period the year before.

News of Office Depot’s foray into the Middle East comes just a month after rival Office1 Superstore boosted its own Middle East credentials by signing a master franchise agreement with Scientific for Computers & Systems (SCS) in Jordan.

SCS, which sells products from vendors such as Acer, HP and Symantec, will oversee the opening of an Office1 store in April, with two further outlets set to follow shortly after.

“We were waiting for an opportunity similar to the one offered by Office1,” explained Mohammad Daleh, managing director at SCS. “Jordan is a growing and promising market. With the sourcing assistance and know-how of Office1 and its experience in retail and franchising, we shall be able to provide our customers with complementary products and services at lower prices in very attractive and centrally-located stores.”

According to US-based Office1, it sees potential for up to 20 franchises in Jordan.