FedEx Cans Kinko’s Name
There’s no doubt that FedEx knows shipping. What it apparently doesn’t know is the office services and supplies business as evidenced by its experience with Kinko’s. The business has languished since FedEx bought Kinko’s in 2003 and the latest answer to fixing the problem comes in the form of a name change. FedEx announced it plans to phase out the Kinko’s name and replace it with FedEx Office.
In announcing the change, Brian Philips, president and chief executive officer of FedEx Office, said, “Kinko’s was primarily a copy and print-service provider when it was acquired in 2004. 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. We are a back office for small businesses and a branch office for medium to large businesses and mobile professionals.”
Donald Broughton, an analyst with Avondale Partners, told Bloomberg that FedEx is “very marketing savvy, so they will tweak the branding of their service offerings.”
According to Mr. Broughton, the problem with Kinko’s isn’t that it has failed to work. The problem is FedEx “paid $2.4 billion for 1,200 storefronts. Kinko’s isn’t worth $2 million a storefront.”
There are currently 1,900 Kinko’s locations worldwide. FedEx announced in December that it was scaling back expansion plans for the business from 300 new outlets this year to 70 in 2009.
Discussion Question: What is your reaction to FedEx’s announcement that it would mothball the Kinko’s name and rebrand the business FedEx Office?