Kinko's struggles two years on from FedEx takeover

The hybrid corporation blames what it describes as a “competitive pricing environment” for the slump, reinforcing the global fall in digital printing rates. It expects the decline in copy revenue to continue.

Kinko's was purchased in February 2004 by FedEx, one of the world's largest transportation and delivery providers, for a total of $3.4 billion.

Results for the third quarter of the financial year show that Kinko's secured revenues of $714 million during the period, a slight rise on last year's result of $711 million. Operating margins clocked in at 1.4 per cent, representing a drop on last year's result of 2.2 per cent.

FedEx attributes the small increase in revenue to continued growth in package acceptance revenues, as well as the benefits flowing on from converting its FedEx World Service Centers to FedEx Kinko's Ship Centres last year.

However, this growth was offset by the decline in copy revenues. Operating margins also took a hit from the drop in copy revenues, as well as increased costs associated with technology and product offering initiatives.


FedEx veteran Kenneth May was named president and CEO of the Kinko's division during the third quarter, while Brian Philips, former vice president of marketing for FedEx, succeeded May as executive vice president and chief operating officer.