FedEx expands reach of shipping services with acquisition of Kinko’s

FedEx Corp. will expand its retail presence for shipping services – including its Consolidated Returns service for online retailers -- in the U.S. and worldwide with its pending acquisition of the 1,200-store business services chain Kinko’s Inc., FedEx says. FedEx, which has maintained a close working relationship with Kinko’s for about 15 years, already offers shipment services through 134 Kinko’s stores but will expand those services through all 1,200 Kinko’s locations worldwide.

"The FedEx and Kinko`s combination will substantially increase our retail presence worldwide and will enable both companies to take advantage of growth opportunities in the fast-moving digital economy," said Frederick W. Smith, chairman, president and CEO of FedEx. "Our two companies share a similar background, culture and customer focus, and that common ground is extremely important as we prepare for future growth and success."

FedEx has agreed to pay $2.4 billion in cash to acquire Kinko’s from investment firm Clayton, Dubilier & Rice Inc.The acquisition is expected to close in the first quarter of 2004.

The Kinko’s deal follows a move earlier this year by FedEx rival UPS, which rebranded more than 3,000 Mail Boxes Etc. shipping and business services stores as The UPS Store. UPS, which acquired Mail Boxes Etc. in 2001, now operates more than 4,000 shipping services centers worldwide.

With Kinko’s included, FedEx will operate more than 2,000 full-service shipping centers worldwide, in addition to 6,200 independently owned and operated FedEx Authorized Ship Centers across the U.S. FedEx also provides about 40,000 drop boxes worldwide. Of the 1,200 Kinko’s locations, 400 operate 24/7.

To expand its global retail presence, FedEx said it plans to "dramatically expand" beyond the current 110 the number of Kinko’s locations outside the U.S.

The FedEx Consolidated Returns service, which launched last summer, now has more than 20 subscribers among large retailers, a spokesman says. The service provides several options for retailers to offer preprinted returns labels or simply return authorization numbers. Customers with a return authorization number can bring a purchased product into any FedEx location – even without the original packaging or receipt – and drop it off for return processing. The service also provides merchants an online method of tracking the returned item.