Office Depot Inc. is continuing its “pivot” to a primarily B2B-focused supplier of office supplies, as its relatively new categories of cleaning, breakroom and technology products helped to partially offset an overall year-to-year dip in first-quarter sales, executives said today.

Gerry Smith, CEO, Office Depot Inc.

The company said its Business Solutions Division, which encompasses its ecommerce channel, reported a 1% drop to $1.3 billion in sales for the fiscal quarter ended March 28. Office Depot doesn’t break out internet sales, but its ecommerce sales “experienced a significant increase in demand” in the first quarter and helped to offset downward pressure on sales related to CO VID-19, the disease caused by the new coronavirus, CEO Gerry Smith said today.

Total sales dropped 2% for the quarter to $2.7 billion, as retail sales also fell 2%, to $1.2 billion. Net income for the quarter was $45 million, compared with $8 million a year earlier.

Office Depot said the 1% drop in the Business Solutions Division, which includes contracts with large enterprise customers, was related to a decline in demand for certain office supplies categories as a number of corporate B2B clients have “either paused operations or temporarily transitioned into a remote work environment” as part of widespread efforts to reduce the spread of COVID-19.

“This effect resulted in lower sales in our contract channel, partially offset by higher sales in our ecommerce channel, as demand increased for certain essential products,” the company said. Such product categories as cleaning and breakroom supplies, technology, furniture and copy and print services “grew to 39% of total Business Solutions Division revenue for the quarter, it said.

“Our B2B focus is helping businesses remain operational in the home or at the office, our facilities have largely remained open serving customers with enhanced sanitation and safety protocols, and our ecommerce platform and retail stores are proving to be trusted means for customers to access the critical products and services they need,” Smith said.

“While significant challenges remain ahead, we are in a strong financial position and remain focused on utilizing our B2B platform to provide essential products and services necessary to help our customers and the nation weather through this pandemic,” Smith said, adding: “We have a global sourcing and supply chain network capable of delivering essential products including personal protective equipment (PPE); we have business support capabilities enabling enterprises and individuals to work from home and learn from home; and we have a business model that has significant variable cost flexibility. We expect that all of these factors place us in a position to successfully navigate this evolving environment.”

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