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FedEx to drop Kinko's name, take write-down

June 03, 2008|From the Associated Press

MEMPHIS, TENN. — FedEx said Monday that it planned to stop using the Kinko's name on its copy and office service stores and book an $891-million charge for the quarter that ended Saturday.

The charge relates to a decision about the use of the Kinko's name and a write-down of the value of its acquisition of the brand. The charge, which works out to $2.22 a share, was not part of FedEx's earnings forecast. The company reports its financial results for its fiscal fourth quarter June 18.

FedEx Corp. said it would change the name of its FedEx Kinko's stores to FedEx Office over the next several years.

"The FedEx Office name better describes the wide range of services available at its retail centers and takes full advantage of the FedEx brand long recognized for excellent customer service, quality and reliability," spokesman Jess Bunn said.

The company said the change was "designed to more sharply focus the division on profitable core revenue growth and incremental shipping volume, which contributes about $1 billion of revenues annually to FedEx Express and FedEx Ground."

In May, Brian D. Phillips was named president and CEO of what is now FedEx Office. In addition, the unit's senior management team was reduced and restructured to control costs.

Earlier this year, the company reduced future capital commitments by slowing its rate of expansion to about 70 new locations in fiscal year 2009 from about 300 locations in fiscal 2008.

Before the announcement, FedEx shares fell $1.06, or 1.2%, to close at $90.65 Monday. They were unchanged in after-hours trading.

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