Photocopy Cats II

In response to the Jan. 1 entry about the FedEx/Kinko’s merger, FC Now reader Don Johnson asks some key questions that could help determine the partnership’s success:

  • Will FedEx retain top Kinkos managers and let them run the business or try to provide “consulting” and centralize certain functions? What’s its track record on this score?
  • How much overlap is there betwen existing FedEx offices and Kinkos shops; how many redundancies will be eliminated?
  • Will FedEx counters really draw more printing customers to Kinkos?
  • Will the FedEx delivery service somehow be used to deliver to Kinkos’ customers?
  • FedEx is borrowing all but $750 million of the $2.5 billion purchase price; will it have the cash flow, capital and borrowing power to expand Kinkos or its core businesses?
  • Will UPS expand its UPS stores to compete with Kinkos?
  • How can UPS counter the FedEx purchase of Kinkos, or does it need to?
  • Kinkos is a marginally profitable business; with the new overhead (depreciation, corporate, etc.), will FedEx be able to increase its profitability?
  • Will Kinkos’ pricing power be helped or hurt? FedEx’s?