Online sales continue to play an increasingly important role at United Stationers Inc., where sales through its Internet channel increased 12% year over year in the first quarter, to about $133 million from less than $120 million a year earlier, as total sales increased 6% to $1.33 billion, the company said this week.
United Stationers, which plans to change its name to Essendant on June 1, defines its online sales as sales processed through its thousands of online wholesalers and—many of which use the company’s technology and services to operate their own e-commerce sites to sell to resellers. “We will continue to invest in digital capabilities that help customers succeed online with enhanced and differentiated services,” CEO Cody Phipps said in a conference call with stock analysts this week.
The company’s online strength helped it absorb a 10% decline in one of its largest markets—sales to the oilfield industry, which have been hit by declining petroleum prices, the company said.
United Stationers said it is positioned to benefit starting next year from its $15 million investment this year in a new online technology platform to improve sales to its wholesaler-reseller clients. “Total cost savings from this initiative are expected to be $5 million to $10 million in the second half of 2016, and $15 million to $20 million on an annual basis thereafter,” the company said.
“Our digital content team is doing a great job advancing our capabilities,” Phipps said. “We now have a common digital content platform for all of our businesses and we are investing in new capabilities that accelerate our ability to cross-sell our broad product portfolio and to help our customers and our manufacture partners sell more effectively online.”
Coinciding with the company’s technology improvements, last week it promoted Janet Zaleska, who has been leading the move to a new online technology platform, to senior vice president and chief information officer.
United Stationers last week also promoted Timothy Connolly from president of the company’s business transformation and supply chain operation to corporate chief operating officer. “With Tim driving day-to-day execution, this will allow me to focus additional attention on our key strategies to win online, drive industrial growth and diversify into higher growth and higher margin channels and categories,” Phipps said.
United Stationers also reported for the first quarter ended March 31:
A net loss of 4.0 million, compared with a year-earlier profit of $21.9 million;
Adjusted net income, which doesn’t include one-time costs related to workforce reduction, facility consolidation and rebranding, was $19.9 million.
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