OfficeMax said it is hiring investment bankers to look at the alternatives. The company wants to use money raised from a stock offering to pay for expansion of the site. OfficeMax, whose shares have fallen 57 percent this year, had $4.34 billion in fiscal 1999 sales.
Internet sales for the third quarter ended Oct. 23 rose sevenfold over the year-earlier quarter, and the company plans to break out the Web site's revenue in upcoming earnings reports. Its customers are primarily small and medium-sized companies.
"OfficeMax was the first office supply superstore to go on line, but Staples.com has recently caught up with them in terms of traffic," said analyst Danielle Fox of J.P. Morgan Securities. "This is an attempt to maintain the momentum of their Web site." She rates the company "market perform."
OfficeMax.com had 925,000 unique visitors in October, compared with bigger rival Staples' site, which had 973,000 visitors, according to Media Metrix, an Internet audience measuring company. Office Depot lagged with 699,000 visitors at its Web site.
In considering a tracking stock, Shaker Heights, Ohio-based OfficeMax follows the trend of Staples, which created a tracking stock for its Internet businesses, including Staples.com, Quillcorp.com and StaplesLink.com. The value of such shares track the performance of a unit of a company, even though it represents a stake in the entire company.
While sharing some customers with OfficeMax stores, the Internet site is building its own customer base. A majority of the site's customers haven't bought products from the store or by telephone in the past year.
Last month, OfficeMax said it will provide Internet access at its 950 stores to give OfficeMax customers the option of ordering through the Web site and have items delivered to their businesses or homes.
The shares of OfficeMax fell 0.06 to 5.31 in New York Stock Exchange trading.
Copyright 1999, Bloomberg L.P. All Rights Reserved. Text here
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