MBE Announces Equity Investment in iShip.com; Both Companies To Develop Web-Based Shipping Solutions for eBay and Other e-Commerce Sites
Technology and Worldwide Growth Initiatives Implemented as MBE Approaches its 20th Anniversary in Year 2000
For Immediate Release
Contact: MAIL BOXES ETC.
Mail Boxes Etc. Global Headquarters
(858) 455-8982
PR@mbe.com
SAN DIEGO (May 25, 1999) -
Mail Boxes Etc. (MBE), the world’s largest franchisor of retail business, communications and postal services, with system sales of $1.5 billion, today announced that it is investing $15 million in a series of initiatives designed to expand the company’s presence in the rapidly growing online shipping services business and to introduce state-of-the-art technology to its network of more than 3,000 domestic franchises. This multi-faceted investment is unprecedented in MBE’s history and represents a new level of synergy between franchisors and franchisees.
As part of this technology investment, the company, a wholly owned subsidiary of US Office Products Company (NASDAQ: OFIS), today announced a strategic alliance with iShip.com, the premier provider of Web-based shipping solutions. MBE has acquired an equity interest in iShip.com, investing alongside eBay, UPS Strategic Enterprise Fund and Draper, Fisher Jurvetson, and has signed a multi-year agreement with iShip.com to develop Web-based shipping programs. In addition, MBE will have a representative on iShip.com’s board of directors. MBE and iShip.com also have signed multi-year agreements with eBay to provide eBay customers with online shipping solutions for their auction transactions. Another component of MBE’s technology initiatives includes the deployment of a digital network that integrates point-of-sale (POS) systems and satellite technology to participating MBE centers nationwide.
"With more than 3,700 centers operating worldwide, and double-digit same store sales growth during the past nine years, MBE is the largest non-food retail franchise and one of the fastest growing franchises in the world. MBE’s unrivaled brick-and-mortar, combined with these technology initiatives, will uniquely position MBE to be the physical pipeline for service and distribution that runs alongside the virtual superhighway," said James Amos, MBE president and CEO. "MBE is bringing high-trust and high-touch to the world of high-tech. It’s a platform that no one else can claim."
"With these investments in technology, MBE will be positioned to play a leadership role in the explosively growing e-commerce arena," said Charles P. Pieper, chairman and CEO of US Office Products Company. "MBE will provide a unique, seamless coordination of shipping solutions to permit consumers to easily buy online. We are confident that such services will benefit our franchisees, stockholders and business partners."
Technology Infrastructure
MBE’s initiative links satellite technology developed by Hughes Network Systems with POS computer systems. The company plans to have 2,500 U.S. MBE centers "wired" by the fall, making MBE the largest networked franchise system in retail business support services. This technology will help MBE franchisees improve customer service, streamline accounting functions, and deliver products and services to Internet customers. The company also expects this technology will provide its franchisees with numerous opportunities to leverage e-commerce business.
"The company’s investment provides qualifying domestic franchisees with an incentive to introduce the POS and satellite technology on an accelerated basis," said Amos. "The level of enthusiasm and support demonstrated by our franchisees is indicative of how committed the MBE system is to being the leading business support service provider in the 21st century. MBE is breaking new ground in providing this type of incentive to its franchise network."
Getting MBE’s franchise system wired is a critical component in the company’s Internet business strategy. The technology will further expand MBE’s ability to provide fast and integrated service to online retailers, auctioneers, and customers, by creating a high-speed digital communications and information processing network among MBE centers, MBE headquarters, vendors and various service providers. This system also provides the opportunity to enhance services for national account customers who make use of multiple MBE centers. Long-term plans include the continued installation of the POS and satellite system both domestically and internationally. Approximately two-thirds of the investment MBE is making will be expensed as the funds are expended during the next 12 to 18 months.
"This is about the emerging Web workstyle and Web lifestyle. We are building a digital nervous system that will provide consumers with information-rich data while connecting them with people who share similar needs and interests," said Amos. "This digital nervous system is a natural extension of our mission to make business, and life, easier."
Bridging Physical and Virtual Worlds
Under the terms of MBE’s agreement with iShip.com, the companies will offer co-branded online shipping services and a tracking manifest system that will allow customers to select the best shipping solution for their needs. iShip.com also will develop a new, customized Web-based manifest system for MBE centers. MBE also has the right to receive warrants to purchase additional iShip.com stock, based upon the volume of packages that are shipped through MBE.
The technology initiative is a crucial component to support MBE’s recently announced five-year agreement with eBay, the world’s leading person-to-person online trading community. Along with iShip.com, the three companies will offer the first-of-its-kind, integrated system for e-commerce shipping. The program is designed to give eBay buyers and sellers easy, convenient and efficient solutions for shipping and receiving items. In addition to Internet-based shipping options, MBE and eBay are exploring ways to develop a "hold for inspection" program that the companies anticipate will enable buyers to accept or refuse delivery upon inspection of items shipped to participating MBE centers.
Worldwide Growth
As MBE deploys technology to expand the reach and capabilities of its franchise system, the company also continues its aggressive plans to build the size of its franchise organization. International expansion has been a critical element in MBE’s recent growth, with seven master licensee agreements covering 16 countries having been signed in the last two years alone. In all, there are nearly 700 MBE centers operating in 29 countries outside the U.S., and master license agreements are in place for the development of the MBE concept in 60 countries.
"The services MBE provides have been readily adapted to varying economic climates and cultures. As examples of the diverse countries in our network, MBE master licensees have franchised centers operating in Canada, Italy, Singapore, United Kingdom, Venezuela, Australia, Saudi Arabia and, as of last month, in Japan and Austria as well," said Amos.
In addition to expanding its network of conveniently located MBE centers, MBE is developing programs for non-traditional site locations. Last December, an MBE center opened in Chicago’s O’Hare International Airport, the nation’s busiest airport, helping business travelers meet their job demands while out of the office. MBE centers also are being opened on college campuses and military bases, in convention centers, hotels, banks, gas station convenience stores, and in urban renewal areas and empowerment zones.
"Non-traditional sites give MBE the opportunity to bring our services to the consumer, regardless of where they live, work, or travel," added Amos.
Full-Range of Services Offered
Consistent with its technology goals, MBE has actively created a number of other alliances with leading technology providers for the development of services geared to MBE customers.
Last fall, MBE, IBM and Infoseek introduced MBE OnlineTM, an Internet offering designed to provide a unique package of services for the small-office / home-office market. MBE Online (URL: www.mbe-online.com) features IBM’s leading Internet service, Infoseek’s award-winning Internet search and navigation services, and content specifically tailored to the needs of small-business owners. In addition, MBE is partnering with DigitalWork to introduce a Virtual MBE center. This virtual center will provide customized online services that help small businesses complete many of their most common business tasks, such as marketing their products or services, finding employees, or researching the competition.
To provide additional technology-based services for consumers, MBE is introducing Computer Time Rental workstations to its domestic centers. The computer workstations offer Microsoft and IBM software, email, and Internet services.
"As MBE approaches its 20th anniversary in the year 2000, we look forward to introducing new programs and further extending our world-class customer service into both the physical and virtual worlds," said Amos.
About MBE:
Mail Boxes Etc., a wholly owned subsidiary of U.S. Office Products Company (NASDAQ: OFIS), is the
world's largest franchisor of retail business communication and postal service centers. There are
more than 3,700 MBE centers operating worldwide, with master licensing agreements in place for the
development of the MBE business in 60 countries around the world. In the United States, MBE centers are
owned and operated by licensed franchisees of Mail Boxes Etc., USA, Inc. Outside the United States, MBE
centers are owned and operated by MBE master licensees or their franchisees. MBE maintains a Web site
at http://www.mbe.com.
About USOP:
US Office Products Company (USOP) is one of North America's leading providers of office supplies, office
furniture, and office breakroom products. In addition to Mail Boxes Etc., USOP also owns and operates
Blue Star Group Limited, a leading supplier of office products and business services in New Zealand and
Australia. USOP’s Web site can be found
at www.usop.com.
Statements in this press release that relate to future plans, objectives, expectations, performance, events and the like are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Future events, risks and uncertainties, individually or in the aggregate, could cause actual results to differ materially from those expressed or implied in these statements. Those factors could include uncertainties related to the development of new technologies, the evolution of e-commerce business, competition in the highly dynamic e-commerce marketplace, and other factors discussed in the "forward-looking information" or "risk factors" sections included in USOP’s Annual Report on Form 10-K and its other filings with the SEC.
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