OfficeMax Hires New Merchandising Head From Bygone Competitor

OfficeMax Inc. (OMX) said Thursday it hired a new merchandising chief who previously led merchandising at another office-supplies company, one that was key to the growth of OfficeMax's biggest competitor.

Ronald Lalla, who will become OfficeMax's executive vice president and chief merchandising officer Monday, previously worked for Corporate Express, which Staples Inc. (SPLS) bought in 2008.

Valued at $4.8 billion, the Corporate Express deal was Staples's largest takeover. It boosted the company's sales by about 40% and catapulted Staples to lead the market handling supplies orders for big businesses. Staples now has $25.02 billion in annual sales versus OfficeMax's $7.1 billion.

OfficeMax is bringing Lalla back to the office-supplies retailing sector after he most recently worked at closely held Katz Group, a big pharmacy operator in Canada. There, he served as chief merchandising officer and chief technology officer. Lalla also held several leadership positions in merchandising, store operations and finance over the course of more than 10 years at Kmart Corp., now part of Sears Holdings Corp. (SHLD).

His arrival at OfficeMax comes as the struggling company is making strategic shifts toward merchandising and other areas of its business. The company recalibrated its merchandising and signage programs to emphasize value after a weak back-to-school season last year. It also hired a new person to oversee technology products recently, an area where OfficeMax has stumbled.

Lalla is the most recent of many new executives to be added to OfficeMax's management ranks. Earlier this month, the company hired a new head of its contract business, and in the last year it has named new heads of its retail, human resources and e-commerce divisions.

Chief Executive Ravi Saligram has said strengthening OfficeMax's management team was part of the company's rebuilding efforts, to ready itself for a new strategic plan. That plan includes closing 15 to 20 U.S. stores per year for the next five years, with accelerated closures in the current year. OfficeMax also is trying mitigate its least profitable contract accounts, make its supply chain more efficient, rein in promotional spending and stress its high-margin private brands.

The company believes such moves set it up for rising profits this year. Sales weakness at OfficeMax has stretched back about four years, with the most recent quarter being only the second quarter to show revenue growth in the last 17.

Saligram said Thursday that as OfficeMax develops new models and retail formats and enters new categories, Lalla's "track record of driving innovations in both the retail and business-to-business office-products sectors will be an asset."

Shares closed up 0.9% at $5.50 and weren't active after hours.

-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com

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