Essendant Prioritizes Private Label

Company looks to increase percentage of own brand in sales.
Eric-Smith-84x84

Essendant heads into the remainder of 2017 with a new brand positioning statement and a new focus on its private label offerings, company executives said in this week's earnings call with analysts and also at last month's show for suppliers and customers in Las Vegas, NV.

The company, which rebranded from United Stationers to Essendant two years ago, recently unveiled a new brand positioning statement of "powering possibilities," a tagline CEO Bob Aiken says is centered on helping resellers grow their business.

At the center of this mission is ramping up its offering private label products for resellers, Aiken first told attendees at the Vegas show and then analysts on Monday's earnings call.

"Our merchandising excellence strategies are underway," he said. "The key levers here are driving lower cost of goods and higher penetration of our Essendant brands, or our private label, building a more effective and efficient assortment and aligning with our key supplier partners to drive profitable growth and market share gains across the channels that we serve."

The company expects this shift to "strengthen our overall assortment (and) improve profitability," Aiken said. "But it will also allow us to reduce working capital as we focus in on a tighter assortment."

Essendant is coming off a lackluster but still improved 2016. The company reported sales for 2016 of $5.4 billion, up 0.1 percent from 2015, and a profit of $63.9 million, compared to a loss of $44.3 million in 2015. For the fourth quarter, sales decreased 3.3 percent to $1.3 billion while the company reported a loss of $2.4 million

By prioritizing private label, the company projects those numbers improving steadily in 2017 and beyond. While private label sales are about 15.5 percent of total revenue, Aiken said, some programs are in the "mid-20s, and so there's a lot of runway for us."

"We'll be talking a lot in coming years about how to increase that private label penetration rate and in a way that's a creative to our customers and ultimately to the end users," Aiken said.

Read more about Essendant in the recent MDM Interview, Essendant’s Path Takes New Twist.

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.