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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: Junkyardawg who wrote (8280)	1/18/1999 8:43:00 PM
From: Tim Luke	Respond to of 90042

Monday January 18, 8:02 pm Eastern Time IBM, OfficeMax in exclusive deal to retail IBM PCs CLEVELAND, Jan 18 (Reuters) - IBM (NYSE:IBM - news) and office retailer OfficeMax Inc. (NYSE:OMX - news) on Monday said they agreed to a deal to sell a wide range of IBM personal computer products in special store-within-a-store areas in OfficeMax's retail outlets. OfficeMax said it will exclusively offer IBM PCs, laptop computers, monitors, servers and related services in an IBM ''store-within-a-store,'' to be staffed by IBM staff in some stores, and IBM-trained OfficeMax personnel in others. Over time the deal, which is designed to bolster IBM's retail profile among small and medium-sized business customers, could be expanded to cover more than 800 OfficeMax outlets, the company said in a statement. The deal promises to bolster IBM's U.S. retail presence and comes a year after it ended its ties to Tandy Corp.'s ''We have determined that this new relationship with IBM will enable us to better serve our small and medium-size business customers as well as higher-end consumers and home office users,'' said Michael Feuer, OfficeMax chairman and CEO. Feuer said the pact, which represents a change in OfficeMax strategy for retailing computers, was ''a major vehicle for us to differentiate our stores from other office products superstore operators.'' OfficeMax said the deal would begin with a two-stage test that would allow IBM to operate licensed computer departments in OfficeMax stores in three U.S. metropolitan markets. The retailer said it would also convert three other markets so that stores in these cities will exclusively feature IBM products. In the IBM test, IBM will provide its own personnel to operate the licensed departments and in the OfficeMax test, OfficeMax will provide the technical sales associates trained by IBM. OfficeMax declined to identify the test markets. ''The needs of the home office and small business segments are important to IBM, and the breadth and depth of our product and service offerings to these customers is unparalleled,'' said Mike Braun, general manager of IBM's Consumer Division. ''Our goal with OfficeMax is to find a better way to deliver solutions to this customer set, not just boxes,'' Braun said of efforts to provide more decision-making information and buying services to small and mediums-sized business customers. OfficeMax said that the new merchandise presentation and department will be located in a prominent position near the front of OfficeMax stores staffed by dedicated technical associates. Initial sites are expected to open this spring. Feuer said the concept could then potentially be expanded throughout the OfficeMax chain over the next 12 to 18 months. Under terms of the deal, OfficeMax will phase out its own computer assortment in the test markets and, during the test period, OfficeMax will be the only office products superstore operator with which IBM will have this type of deal. OfficeMax operates 832 retail superstores in more than 350 markets in 49 states and Puerto Rico, all of which could potentially include a licensed IBM computer department. As previously announced, OfficeMax expects to add roughly another 100 superstores in the United States in fiscal 1999 and plans to continue to expand at this, or a higher rate over the next five years. IBM ranked No. 3 in overall U.S. shipments of PCs in the third quarter of 1998, the latest period for which data is available, behind Compaq and Dell (Nasdaq:DELL - news), a direct supplier of PCs. but ahead of No. 4 ranked Hewlett-Packard Co. (NYSE:HWP - news)