FedEx drops Kinko
FedEx Corp., the largest air-cargo shipper, will record a cost of $696 million to rename the Kinko’s unit as FedEx Office to win more large business customers.
The non-cash charge of $2.22 a share will be taken in the fiscal fourth quarter, which ended on May 31, FedEx said in a June 2 statement. The cost, linked to use of the Kinko’s name and goodwill from the unit’s 2004 acquisition, will be $891 million before taxes, the Memphis, Tenn.-based company said.
Kinko’s founder Paul Orfalea, a South Coast resident, had no comment on the move. The change follows FedEx’s decision in December to slow expansion of the office-supply and copy unit to about 70 new outlets in fiscal 2009 from 300 in 2008. FedEx Kinko’s accounted for about $1.59 billion in sales, or 5.6 percent of
FedEx’s total, through the first nine months of the fiscal year. FedEx acquired the chain to gain access to small shippers who pay higher prices, to make it easier for them to use FedEx and to compete with the UPS Stores of United Parcel Service Inc., the largest package-delivery company.
About 1,900 FedEx Office locations operate worldwide, up from 1,200 when FedEx bought Kinko’s for $2.4 billion.