Staples Inc. (NASDAQ: SPLS) is a large office supply chain store, with over 2,000 stores worldwide in 26 countries. Based in Framingham, Massachusetts, United States, the company has retail stores, serving customers under its original name in Austria, Brazil, China, Denmark, France, Germany, India, Italy, Norway, Portugal, United Kingdom, and the United States, while operating subsidiaries in Argentina as Officenet-Staples, Belgium and Netherlands as Office Centre, Canada as Staples Canada (Bureau En Gros in Quebec), and in Italy as Mondoffice. Staples also does business exclusively with enterprises in multiple European countries as Staples Advantage.
Staples sells supplies, office machines, promotional products, furniture, technology and business services both in stores and online. The company opened its first store in Brighton, Massachusetts in 1986. Quill Corporation is Staples most profitable division, accounting for nearly 25% of the company's net income. Between 1998 and 2009 Quill grew from $500 million in revenues to over $1.3 billion. The company is still one of Staples' fastest growing divisions and is led by Michael Patriarca, President of Quill Corporation.
Staples, Inc. is the country's largest operator of office supplies superstores, offering a vast selection of products at low prices, primarily to small business owners. Staples pioneered this concept in 1986 and grew rapidly after opening its first store in the Boston area. The company subsequently expanded to areas outside the Northeast; by the early 2000s, there were about 1,300 Staples outlets located both in major metropolitan areas and smaller markets in 45 states, the District of Columbia, and 10 Canadian provinces. In addition to the retail operations, the company runs a delivery business that encompasses catalog and Internet businesses under the Staples and Quill names, as well as contract stationery businesses, which deliver office supplies to medium-sized and large companies. Staples' European operations consist of nearly 200 retail outlets, under the Staples name in the United Kingdom and Germany and under the name Office Centre in the Netherlands and Portugal. The firm also runs a number of international mail-order office-products businesses: JPG and Bernard in France and Belgium, Kalamazoo in Spain, Neat Ideas in the United Kingdom, and MondOffice in Italy.
Staples, Inc. (Staples), incorporated in 1985, is an office products company. As of January 29, 2011, Staples served customers of all sizes in 26 countries throughout North America, Europe, Australia, South America, and Asia. The Company operates three business segments: North American Delivery, North American Retail and International Operations. In July 2010, Staples, Inc. acquired Oy Lindell Ab. During the fiscal year ended January 29, 2011 (fiscal 2010), the Company acquired the remaining shares in Corporate Express Australia Limited.
North American Delivery
The Company’s North American Delivery segment consists of the United States and Canadian business units that sell and deliver office products and services directly to consumers and businesses, and includes Staples Advantage, Staples.com and Quill.com. The majority of its delivery customers place their orders on-line. Its Contract operations focus on serving the needs of mid-sized businesses and organizations through Staples Business Advantage and Fortune 1000 companies through Staples National Advantage.
Staples.com operations combine the activities of the Company’s United States and Canadian Internet sites, as well as its direct mail catalog business. Staples.com is primarily designed to reach small businesses and home offices, offering next business day delivery for most office supply orders in a majority of its markets. Staples market Staples.com through Internet and other media advertising, direct mail advertising, catalog mailings, and a telesales group generating new business and growing existing accounts. Quill.com is an Internet and catalog business with a targeted approach to servicing the needs of small and medium-sized businesses in the United States. Quill.com offers customer service, Quill brand products and special services. Quill.com also operates Medical Arts Press, Inc., a specialty Internet and catalog business offering products for medical professionals.
North American Retail
North American Retail segment consists of the United States and Canadian business units that operate office products stores. As of January 29, 2011, the Company’s North American Retail segment consisted of 1,575 stores in the United States and 325 stores in Canada. Staples operate a portfolio of four retail store formats, tailored to the characteristics of each location. The Dover superstore represents the majority of its United States store base. It also operates a 14,600 square foot store format designed for rural markets and a 10,000 square foot store suited to dense urban markets, such as New York City. Additionally, it operates approximately 26 stand alone copy and print shops. This 3,000 to 4,000 square foot store is designed for locations with high customer density and offers a full service copy and print shop and an assortment of core office supplies. During fiscal 2010, the Company opened 41 new stores.
International Operations
The Company’s International Operations segment consists of businesses in 24 countries in Europe, Australia, South America, and Asia. Its European Office Products business represents a multi-channel portfolio serving contract, retail, and catalog customers in 18 countries. Staples operate 332 retail stores with the concentration of stores in the United Kingdom, Germany, the Netherlands and Portugal. It operates a catalog business with concentration of sales in France and Italy.
The Company also operates a European printing systems business, which it acquired as part of the Corporate Express acquisition. European printing systems business is a value added reseller of printing equipment and related services, supplies, and spare parts, and is an independent distributor of Heidelberg offset printing presses. During fiscal 2010, it also launched a catalog and online business in Australia, to provide small business customers with differentiated offerings. It operates retail and delivery businesses in China, a delivery business in Taiwan through a joint venture with UB Express, and a multi-channel business in India through a joint venture with Pantaloon Retail Limited. The Company also operates delivery businesses in Argentina and Brazil, and operate two stores in Argentina.
The Company competes with Office Depot, OfficeMax, Lyreco, Wal-Mart, Target, Tesco, Costco, Best Buy, Apple, FedEx Office and Amazon com.
After a remarkably and consistently successful performance since its founding--sales and earnings had increased 30 percent per year for 12 years--Staples finally ran into trouble in the early 2000s. During the latter months of 2000, the retail market for office supplies began foundering. The boom years of the 1990s were over, and the growth of small businesses and home offices--the core of Staples' customer base--was fading away. Early in 2000 the company announced plans to sell its Internet tracking stock through an initial public offering (IPO), but the bursting of the stock market bubble soon thereafter forced Staples to abandon this plan (the tracking stock was later converted into Staples stock). Furthermore, the firm had made a number of investments in various Internet services that were offered through its web site, which proved to be a money-losing strategy. Staples announced in January 2001 that it would take a $206 million writeoff related to various web investments. As a result, net income for fiscal 2000 totaled just $59.7 million, compared to $315 million for the previous year, although revenues increased 19 percent and surpassed the $10 billion plateau for the first time. Later in 2001, the Internet operations were merged into Staples Direct, the company's thriving catalog unit.
In February 2002 Sargent was promoted to president and CEO, while Stemberg remained chairman. Sargent was charged with leading Staples through its transition from a growth-oriented young retail firm to a more mature company competing in an industry dealing with an increasingly saturated U.S. market. Changes began almost immediately. In March 2002 Staples announced a plan to close 31 underperforming stores, most of which were located in small towns, taking a charge of $50.1 million in the process. The company also considerably slowed its pace of expansion, opening just 72 new stores in North America and 14 in Europe during fiscal 2002, compared to 117 and 19, respectively, the prior year. Furthermore, expansion into new markets was curtailed as well. Many of the new outlets were located in large metropolitan areas where Staples already had a presence. The company also launched a remodeling effort, converting a significant number of stores from the original warehouse design to more of a boutique look, with an open design and lower shelves--all aimed at making it easier and faster for customers to find what they were looking for. The new format was supported through an advertising campaign, launched in early 2003, featuring the new slogan, "That was easy." Finally, under Sargent, Staples eliminated hundreds of items from the store shelves as it sought to shift the chain's focus away from casual shoppers toward small businesses and what were termed "power users." The latter were defined as customers who purchased more than $500 per year of office supplies, and such customers included home-based businesses, persons with home offices, and teachers. Small businesses and power users accounted for 70 percent of Staples' revenues and fully 90 percent of profits.
While overhauling its core North American retailing operations, Staples was also completing acquisitions at home and abroad. The company looked to purchase delivery-based businesses, which tended to have higher profit margins than retailing operations. In July 2002 Staples bought Medical Arts Press, Inc. (MAP) for $383.2 million. Based in Minneapolis with 2001 revenues of $168 million, MAP was a direct marketer of specialized printed office products and practice-related supplies to healthcare offices. MAP became a division of Quill Corporation. Staples in October 2002 spent EUR 806 million (US$788 million) for the European mail-order businesses of Guilbert S.A., a subsidiary of Pinault-Printemps-Redoute S.A. of France. The operations gained through this deal had revenues of about $425 million in 2001, and they sold office supplies and furniture via catalogs and Internet web sites to small businesses under several brands: JPG and Bernard in France and Belgium, Kalamazoo in Spain, Neat Ideas in the United Kingdom, and MondOffice in Italy.
Early indications were that Staples' various strategy shifts were paying off. Despite the continuing economic downturn in the United States, Staples managed to post an 8 percent increase in fiscal 2002 sales to $11.6 billion--a jump that enabled the company for the first time to surpass rival Office Depot (which reported 2002 revenues of $11.4 billion). Net income was a record $446.1 million. Staples planned to continue its more modest pace of expansion, opening between 75 and 90 stores in North America during 2003. Another 20 stores were slated to open in Europe that year, including the expansion of the Office Centre concept into Belgium. It appeared that Staples had gotten past the rough patch it encountered earlier in the decade and was ready to enter a new period of industry-leading growth.
Principal Subsidiaries: Hayes Marketing, Inc.; Medical Arts Press, Inc.; Quill Corporation; Smilemakers, Inc.; JPG Benelux SPRL (Belgium); The Business Depot, Ltd. (Canada); JPG SA (France); Reliable France SA; Bernard SA (France); Staples (Deutschland) GmbH (Germany); Mondoffice Srl (Italy); Business Office Supply B.V. (Netherlands); Staples Netherlands B.V.; Sistemas Kalamazoo SA (Spain); Neat Ideas Limited (U.K.); Staples UK Limited.
Principal Operating Units: North American Retail; North American Delivery; European Operations.
Principal Competitors: Office Depot, Inc.; OfficeMax, Inc.; Buhrmann N.V.
OVERALL
Beta: 0.82
Market Cap (Mil.): $14,607.96
Shares Outstanding (Mil.): 716.08
Annual Dividend: 0.40
Yield (%): 1.96
FINANCIALS
SPLS.O Industry Sector
P/E (TTM): 16.77 4.95 21.07
EPS (TTM): 19.04 -- --
ROI: 9.13 5.10 1.78
ROE: 12.86 6.15 2.74
Statistics:
Public Company
Incorporated: 1985
Employees: 57,816
Sales: $11.6 billion (2002)
Stock Exchanges: NASDAQ
Ticker Symbol: SPLS
NAIC: 453210 Office Supplies and Stationery Stores; 454110 Electronic Shopping and Mail-Order Houses
Key Dates:
1985: Thomas G. Stemberg and Leo Kahn found Staples, Inc.
1986: Founders open the first Staples store--the first office supplies superstore--in Brighton, Massachusetts.
1989: Company raises $37 million through an initial public offering.
1990: First stores in California are opened.
1991: Company establishes first non-U.S. venture, an investment in Canadian office superstore The Business Depot, Ltd.
1992: Staples enters the European market for the first time.
1996: Staples enters into agreement to acquire archrival Office Depot.
1997: Merger with Office Depot is blocked on antitrust grounds.
1998: Quill Corporation is acquired; staples.com is launched.
2002: Staples acquires Medical Arts Press, Inc. and the European mail-order businesses of Guilbert S.A.
Name Age Since Current Position
Ronald Sargent 55 2006 Chairman of the Board, Chief Executive Officer
Michael Miles 49 2006 President, Chief Operating Officer
John Mahoney 59 2006 Vice Chairman, Chief Financial Officer
Joseph Doody 58 2002 President - Staples North American Delivery
Demos Parneros 48 2002 President - U.S. Stores
Kristin Campbell 49 2007 Senior Vice President, General Counsel, Secretary
Christine Komola 43 2004 Senior Vice President, Corporate Controller
Arthur Blank 68 2007 Lead Independent Director
Paul Walsh 61 1990 Independent Director
Mary Burton 59 1993 Independent Director
Rowland Moriarty 64 1986 Independent Director
Basil Anderson 66 2006 Independent Director
Robert Nakasone 63 1986 Independent Director
Vijay Vishwanath 51 2007 Independent Director
Justin King 49 2007 Independent Director
Robert Sulentic 54 2007 Independent Director
Carol Meyrowitz 57 2007 Independent Director
Elizabeth Smith 47 2008 Independent Director
Address:
500 Staples Drive
Framingham, Massachusetts 01702-4478
U.S.A.
Staples sells supplies, office machines, promotional products, furniture, technology and business services both in stores and online. The company opened its first store in Brighton, Massachusetts in 1986. Quill Corporation is Staples most profitable division, accounting for nearly 25% of the company's net income. Between 1998 and 2009 Quill grew from $500 million in revenues to over $1.3 billion. The company is still one of Staples' fastest growing divisions and is led by Michael Patriarca, President of Quill Corporation.
Staples, Inc. is the country's largest operator of office supplies superstores, offering a vast selection of products at low prices, primarily to small business owners. Staples pioneered this concept in 1986 and grew rapidly after opening its first store in the Boston area. The company subsequently expanded to areas outside the Northeast; by the early 2000s, there were about 1,300 Staples outlets located both in major metropolitan areas and smaller markets in 45 states, the District of Columbia, and 10 Canadian provinces. In addition to the retail operations, the company runs a delivery business that encompasses catalog and Internet businesses under the Staples and Quill names, as well as contract stationery businesses, which deliver office supplies to medium-sized and large companies. Staples' European operations consist of nearly 200 retail outlets, under the Staples name in the United Kingdom and Germany and under the name Office Centre in the Netherlands and Portugal. The firm also runs a number of international mail-order office-products businesses: JPG and Bernard in France and Belgium, Kalamazoo in Spain, Neat Ideas in the United Kingdom, and MondOffice in Italy.
Staples, Inc. (Staples), incorporated in 1985, is an office products company. As of January 29, 2011, Staples served customers of all sizes in 26 countries throughout North America, Europe, Australia, South America, and Asia. The Company operates three business segments: North American Delivery, North American Retail and International Operations. In July 2010, Staples, Inc. acquired Oy Lindell Ab. During the fiscal year ended January 29, 2011 (fiscal 2010), the Company acquired the remaining shares in Corporate Express Australia Limited.
North American Delivery
The Company’s North American Delivery segment consists of the United States and Canadian business units that sell and deliver office products and services directly to consumers and businesses, and includes Staples Advantage, Staples.com and Quill.com. The majority of its delivery customers place their orders on-line. Its Contract operations focus on serving the needs of mid-sized businesses and organizations through Staples Business Advantage and Fortune 1000 companies through Staples National Advantage.
Staples.com operations combine the activities of the Company’s United States and Canadian Internet sites, as well as its direct mail catalog business. Staples.com is primarily designed to reach small businesses and home offices, offering next business day delivery for most office supply orders in a majority of its markets. Staples market Staples.com through Internet and other media advertising, direct mail advertising, catalog mailings, and a telesales group generating new business and growing existing accounts. Quill.com is an Internet and catalog business with a targeted approach to servicing the needs of small and medium-sized businesses in the United States. Quill.com offers customer service, Quill brand products and special services. Quill.com also operates Medical Arts Press, Inc., a specialty Internet and catalog business offering products for medical professionals.
North American Retail
North American Retail segment consists of the United States and Canadian business units that operate office products stores. As of January 29, 2011, the Company’s North American Retail segment consisted of 1,575 stores in the United States and 325 stores in Canada. Staples operate a portfolio of four retail store formats, tailored to the characteristics of each location. The Dover superstore represents the majority of its United States store base. It also operates a 14,600 square foot store format designed for rural markets and a 10,000 square foot store suited to dense urban markets, such as New York City. Additionally, it operates approximately 26 stand alone copy and print shops. This 3,000 to 4,000 square foot store is designed for locations with high customer density and offers a full service copy and print shop and an assortment of core office supplies. During fiscal 2010, the Company opened 41 new stores.
International Operations
The Company’s International Operations segment consists of businesses in 24 countries in Europe, Australia, South America, and Asia. Its European Office Products business represents a multi-channel portfolio serving contract, retail, and catalog customers in 18 countries. Staples operate 332 retail stores with the concentration of stores in the United Kingdom, Germany, the Netherlands and Portugal. It operates a catalog business with concentration of sales in France and Italy.
The Company also operates a European printing systems business, which it acquired as part of the Corporate Express acquisition. European printing systems business is a value added reseller of printing equipment and related services, supplies, and spare parts, and is an independent distributor of Heidelberg offset printing presses. During fiscal 2010, it also launched a catalog and online business in Australia, to provide small business customers with differentiated offerings. It operates retail and delivery businesses in China, a delivery business in Taiwan through a joint venture with UB Express, and a multi-channel business in India through a joint venture with Pantaloon Retail Limited. The Company also operates delivery businesses in Argentina and Brazil, and operate two stores in Argentina.
The Company competes with Office Depot, OfficeMax, Lyreco, Wal-Mart, Target, Tesco, Costco, Best Buy, Apple, FedEx Office and Amazon com.
After a remarkably and consistently successful performance since its founding--sales and earnings had increased 30 percent per year for 12 years--Staples finally ran into trouble in the early 2000s. During the latter months of 2000, the retail market for office supplies began foundering. The boom years of the 1990s were over, and the growth of small businesses and home offices--the core of Staples' customer base--was fading away. Early in 2000 the company announced plans to sell its Internet tracking stock through an initial public offering (IPO), but the bursting of the stock market bubble soon thereafter forced Staples to abandon this plan (the tracking stock was later converted into Staples stock). Furthermore, the firm had made a number of investments in various Internet services that were offered through its web site, which proved to be a money-losing strategy. Staples announced in January 2001 that it would take a $206 million writeoff related to various web investments. As a result, net income for fiscal 2000 totaled just $59.7 million, compared to $315 million for the previous year, although revenues increased 19 percent and surpassed the $10 billion plateau for the first time. Later in 2001, the Internet operations were merged into Staples Direct, the company's thriving catalog unit.
In February 2002 Sargent was promoted to president and CEO, while Stemberg remained chairman. Sargent was charged with leading Staples through its transition from a growth-oriented young retail firm to a more mature company competing in an industry dealing with an increasingly saturated U.S. market. Changes began almost immediately. In March 2002 Staples announced a plan to close 31 underperforming stores, most of which were located in small towns, taking a charge of $50.1 million in the process. The company also considerably slowed its pace of expansion, opening just 72 new stores in North America and 14 in Europe during fiscal 2002, compared to 117 and 19, respectively, the prior year. Furthermore, expansion into new markets was curtailed as well. Many of the new outlets were located in large metropolitan areas where Staples already had a presence. The company also launched a remodeling effort, converting a significant number of stores from the original warehouse design to more of a boutique look, with an open design and lower shelves--all aimed at making it easier and faster for customers to find what they were looking for. The new format was supported through an advertising campaign, launched in early 2003, featuring the new slogan, "That was easy." Finally, under Sargent, Staples eliminated hundreds of items from the store shelves as it sought to shift the chain's focus away from casual shoppers toward small businesses and what were termed "power users." The latter were defined as customers who purchased more than $500 per year of office supplies, and such customers included home-based businesses, persons with home offices, and teachers. Small businesses and power users accounted for 70 percent of Staples' revenues and fully 90 percent of profits.
While overhauling its core North American retailing operations, Staples was also completing acquisitions at home and abroad. The company looked to purchase delivery-based businesses, which tended to have higher profit margins than retailing operations. In July 2002 Staples bought Medical Arts Press, Inc. (MAP) for $383.2 million. Based in Minneapolis with 2001 revenues of $168 million, MAP was a direct marketer of specialized printed office products and practice-related supplies to healthcare offices. MAP became a division of Quill Corporation. Staples in October 2002 spent EUR 806 million (US$788 million) for the European mail-order businesses of Guilbert S.A., a subsidiary of Pinault-Printemps-Redoute S.A. of France. The operations gained through this deal had revenues of about $425 million in 2001, and they sold office supplies and furniture via catalogs and Internet web sites to small businesses under several brands: JPG and Bernard in France and Belgium, Kalamazoo in Spain, Neat Ideas in the United Kingdom, and MondOffice in Italy.
Early indications were that Staples' various strategy shifts were paying off. Despite the continuing economic downturn in the United States, Staples managed to post an 8 percent increase in fiscal 2002 sales to $11.6 billion--a jump that enabled the company for the first time to surpass rival Office Depot (which reported 2002 revenues of $11.4 billion). Net income was a record $446.1 million. Staples planned to continue its more modest pace of expansion, opening between 75 and 90 stores in North America during 2003. Another 20 stores were slated to open in Europe that year, including the expansion of the Office Centre concept into Belgium. It appeared that Staples had gotten past the rough patch it encountered earlier in the decade and was ready to enter a new period of industry-leading growth.
Principal Subsidiaries: Hayes Marketing, Inc.; Medical Arts Press, Inc.; Quill Corporation; Smilemakers, Inc.; JPG Benelux SPRL (Belgium); The Business Depot, Ltd. (Canada); JPG SA (France); Reliable France SA; Bernard SA (France); Staples (Deutschland) GmbH (Germany); Mondoffice Srl (Italy); Business Office Supply B.V. (Netherlands); Staples Netherlands B.V.; Sistemas Kalamazoo SA (Spain); Neat Ideas Limited (U.K.); Staples UK Limited.
Principal Operating Units: North American Retail; North American Delivery; European Operations.
Principal Competitors: Office Depot, Inc.; OfficeMax, Inc.; Buhrmann N.V.
OVERALL
Beta: 0.82
Market Cap (Mil.): $14,607.96
Shares Outstanding (Mil.): 716.08
Annual Dividend: 0.40
Yield (%): 1.96
FINANCIALS
SPLS.O Industry Sector
P/E (TTM): 16.77 4.95 21.07
EPS (TTM): 19.04 -- --
ROI: 9.13 5.10 1.78
ROE: 12.86 6.15 2.74
Statistics:
Public Company
Incorporated: 1985
Employees: 57,816
Sales: $11.6 billion (2002)
Stock Exchanges: NASDAQ
Ticker Symbol: SPLS
NAIC: 453210 Office Supplies and Stationery Stores; 454110 Electronic Shopping and Mail-Order Houses
Key Dates:
1985: Thomas G. Stemberg and Leo Kahn found Staples, Inc.
1986: Founders open the first Staples store--the first office supplies superstore--in Brighton, Massachusetts.
1989: Company raises $37 million through an initial public offering.
1990: First stores in California are opened.
1991: Company establishes first non-U.S. venture, an investment in Canadian office superstore The Business Depot, Ltd.
1992: Staples enters the European market for the first time.
1996: Staples enters into agreement to acquire archrival Office Depot.
1997: Merger with Office Depot is blocked on antitrust grounds.
1998: Quill Corporation is acquired; staples.com is launched.
2002: Staples acquires Medical Arts Press, Inc. and the European mail-order businesses of Guilbert S.A.
Name Age Since Current Position
Ronald Sargent 55 2006 Chairman of the Board, Chief Executive Officer
Michael Miles 49 2006 President, Chief Operating Officer
John Mahoney 59 2006 Vice Chairman, Chief Financial Officer
Joseph Doody 58 2002 President - Staples North American Delivery
Demos Parneros 48 2002 President - U.S. Stores
Kristin Campbell 49 2007 Senior Vice President, General Counsel, Secretary
Christine Komola 43 2004 Senior Vice President, Corporate Controller
Arthur Blank 68 2007 Lead Independent Director
Paul Walsh 61 1990 Independent Director
Mary Burton 59 1993 Independent Director
Rowland Moriarty 64 1986 Independent Director
Basil Anderson 66 2006 Independent Director
Robert Nakasone 63 1986 Independent Director
Vijay Vishwanath 51 2007 Independent Director
Justin King 49 2007 Independent Director
Robert Sulentic 54 2007 Independent Director
Carol Meyrowitz 57 2007 Independent Director
Elizabeth Smith 47 2008 Independent Director
Address:
500 Staples Drive
Framingham, Massachusetts 01702-4478
U.S.A.