The International Division sells office products and services in sixteen countries outside the United States and Canada through the Office Depot brand and the Viking Office Products brand direct mail catalogs, Internet sites, and Office Depot contract sales force. The International direct marketing business was launched in 1990, under the Viking Office Products brand with the base of operations in the United Kingdom. In March 1999, Office Depot introduced its first international public web site for individuals and businesses in the United Kingdom. Between 2000 and 2001, nine new public Web sites and one contract web site are expected in the following countries: Germany, the Netherlands, Japan, France, Austria, and the United Kingdom.
In 2000, Office Depot conducted a comprehensive business review of all aspects of its business. This review resulted in a significant change in the company's strategic direction and led to modifications of all important business practices. Among other things, the review resulted in a decision to close 70 under-performing North American retail stores, close and relocate two warehouses, invest in new warehouse technologies, reduce the number of slower moving SKUs in the retail stores and North American warehouses, and modify business practices to increase efficiency. During 2001, Office Depot closed 73 stores, 70 of which were identified as part of the comprehensive business review, and also identified ten additional under-performing stores to be closed in 2001. .
While sales decreased in 2001, gross profit as a percent of sales increased. Sales shifted away from lower-margin computer hardware, software, and office furniture and into products such as machine and office supplies, as well as additional copy center services. Sales of computer products declined 26% in 2001 compared with an increase of 3% in 2000. During 1999, Office Depot offered low priced units and more aggressive promotional programs on computer products, which resulted in strong sales for that year and lower margin percentages.
