UPS sells MBE brand outside US, Canada, India

"We had an opportunity with Fineffe Group's success and their passion in what they've already built out, they were eager to be aggressive in continuing to grow the brand around the world, and we felt like it was a good evolution from an international franchising strategy to work with Fineffe Group,"… UPS shares fell $1.44, or 2.6 percent, to $54.39.

The Associated Press
May 11, 2009

UPS sells MBE brand outside US, Canada, India
Harry R. Weber

ATLANTA (AP) — Shipping giant UPS Inc., hit hard by the global economic downturn, said Tuesday it has sold much of its international Mail Boxes Etc. brand to Italian holding company Fineffe Group for an undisclosed sum so it can focus on its MBE and UPS Store brands in the U.S., Canada and India.

UPS spokeswoman Susan Rosenberg said finances were not the main reason for the sale, though she acknowledged it was a good deal for UPS, which will continue as the preferred carrier for express services offered at the international retail stores.

"There's always going to be a financial benefit," Rosenberg said. "That's prudent stewardship for the organization. It is the evolving nature of international franchising."

She indicated the money could be used for other growth opportunities or ongoing operations.

Last month, Atlanta-based UPS, also known as United Parcel Service, reported that its first-quarter profit plunged as fewer people sent packages and used premium services like next-day air amid the global financial crisis. The world's largest shipping carrier also gave a disappointing second-quarter outlook, and disclosed it shed 10,000 domestic jobs during the first three months of the year.

UPS earnings in the January-March period fell more than 55 percent to $401 million as revenue dropped more than 13 percent, compared to profit of $906 million a year ago.

The results missed Wall Street expectations, and UPS provided an outlook for second-quarter earnings that was below analysts expectations.

Previously, it said that talks with DHL about carrying some of its air packages had ended, scuttling a venture that originally was expected to generate up to $1 billion in annual revenue for UPS.

Analysts expected the deal to fall through after DHL decided that it would no longer offer U.S. domestic-only air and ground services.

In 2001, UPS acquired the Mail Boxes Etc. chain. In 2003, UPS initiated a rebranding effort in the U.S. and Canada under The UPS Store banner. Some of the MBE franchisees chose to keep the Mail Boxes Etc. name.

Today, there are 4,800 independently owned and operated UPS Store and MBE locations in the U.S., Canada and India. The vast majority are called The UPS Store. UPS will remain the owner of the brand in those three countries, Rosenberg said.

There are 1,227 MBE stores in 30 other countries, and Fineffe Group, already a major franchisee of overseas MBE stores, now owns the brand in those countries.

"We had an opportunity with Fineffe Group's success and their passion in what they've already built out, they were eager to be aggressive in continuing to grow the brand around the world, and we felt like it was a good evolution from an international franchising strategy to work with Fineffe Group," Rosenberg said.

The Fineffe Group is the holding company of the Fiorelli family business interests, operating since 1993 with affiliates for retail services under the brands Mail Boxes Etc., Western Union, Direfarestampare and Credit Planet.

In afternoon trading, UPS shares fell $1.44, or 2.6 percent, to $54.39.

Copyright © 2009 The Associated Press. All rights reserved.

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