Paper Clipped

Paper Clipped

One office supply merger is not happening in a big box near you.

The paper clip merger is complete.

The February joining of S&T Office Products of St. Paul and Burnsville-based Innovative Office Solutions has created the Upper Midwest region’s largest independent office supplier at a time the niche is under considerable stress and consolidation. The courtship—as Innovative’s founder and CEO Jennifer Smith calls it—was two years in the making.

Although the office products industry is in decline—with a digital, paperless workflow dominating most large companies—Smith says the merger has an upside. “The biggest thing is that we have reinvented ourselves,” Smith said. “By taking costs out of the channel and opening up new categories, we can now optimize more efficient ways to get customers their products.” The combined company has 200 employees, but will not disclose other financials.

People still need desks. Innovative’s furniture department represents one of those categories—the niche that represented 35 to 40 percent of S&T’s sales.

“We were looking at customer bases and how they were overlapping,” director of marketing Vicki Giefer says. “S&T had a very strong presence in the legal community, where Innovative had it in big, diverse companies. They even hold the State of Minnesota contract.”

The concurrent national merger of Staples and Office Depot (priced at $6.3 billion) raises the question of how the smaller merged office supply concern can compete in a mega era.

“When it’s up to me, I go with service over price,” says Andy Lunzer, head of office service at Mithun advertising. “I don’t see us ever not using paper, so we’ll always work with Innovative in one way or another.”

And some of that disruptive technology represents opportunity as well. “If an office products dealer has not invested in technology, they just can’t stay in business,” says Smith. “We have strong partnerships with vendors like Hewlett-Packard, so when they develop something, we’ll be first to market it.”

—Sam Schaust