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United Stationers CEO: Diversification is Core Part of Strategy

Master distributor continues to expand presence in janitorial and breakroom supplies.
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United Stationers (Nasdaq: USTR) recently became Office Depot’s primary supplier of janitorial and breakroom products, a result which supports United Stationers’ initiative to combine its office products and janitorial supplies platforms.

Janitorial supplies is one of United Stationers’ growth areas.

The master distributor has three businesses: LagasseSweet (jan-san); ORS Nasco (industrial); and United Stationers Supply Co. (office products and furniture).

“Our expansion into a broader range of essential products that are applicable to all types of businesses will offer our reseller partners the ability to serve a wider base of customers more efficiently and effectively,” said Cody Phipps, president and CEO of United Stationers, Deerfield, IL, in the master distributor’s first-quarter 2014 earnings call.

United Stationers wants to become a one-stop shop for resellers. As part of that, it recently announced new breakroom programs including its Perks Program focused on coffee services and a service that gives United’s resellers access to office-ready breakroom products in “value pack sizes.” Those programs will allow it, according to a news release, to “challenge office coffee service dealers,” as well as round out its office products portfolio.

“I think the independents are proving themselves to be very fast and flexible and adaptive,” Phipps said in the earnings call. “So the strong independents are very quick to diversify their portfolios to sell more jan-san, sell more breakroom, move online, and I think that's helping them hold their own.”

And United Stationers will be targeting acquisitions to further diversify its products and services for distributors. “Diversification is a core part of our strategy now,” Phipps said. “We will be pursuing additional acquisitions, both from a capability-building standpoint and a diversification standpoint.”

Diversification grew in importance during the recession as distributors recognized new products and services could help buffer their companies from the ups and downs of the volatile economy. Read more in A Growing Focus on Diversification.

What’s more, with increased access to more products, smaller distributors can often look larger than they are through a master distribution partner, according to master distributors interviewed for the MDM article on the Growing Role of Master Distributors.

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