netrashetty
Netra Shetty
Staples Inc. (NASDAQ: SPLS) is the world's largest 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, 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.
The L in the logo is a stylized staple.
Staples Inc. (NASDAQ:SPLS) is the world's largest office products company, generating $24.3 billion in sales in 2009, up 5.2% from 2008.[1] Not only is the company ahead of its closest competitors in terms of revenue -- Office Depot (ODP) had revenue of $12.1 billion (a 16% decline))[2] and Officemax (OMX) had sales of $7.2 billion (down 12.8%)[3] -- but it is the only one to have positive profits in 2009 -- Staples profits were $739 million.
While Staples is the overall leader, it has embarked on several initiatives to extend its lead. For its physical retail locations, the company has significantly remodeled older stores while introducing smaller store formats in less-populated areas. To increase its margin, Staples has increased the mix of private label offerings (i.e., Staples brand products) and emphasized the purchase of products directly from manufacturers instead of distributors.
In 2008, Staples acquired Corporate Express N.V., one of the world's leading suppliers of office products to businesses and institutions, with hopes to increase its presence in the international market. The acquisition has also helped the company's performance in the sluggish economy as it put less pressure on the company's North American retail business.
Company Overview
Products[4]
Office Supplies and Services (47.9% of net sales)
Business Machines and Related Products (31.8% of net sales)
Computers and Related Products (15% of net sales)
Office Furniture (5.3% of net sales)
Operating Segments[5]
Contents
1 Company Overview
1.1 Products[4]
1.2 Operating Segments[5]
1.3 Acquisition of Corporate Express
2 Business Growth
2.1 FY 2009 (ended January 30, 2010)[1]
3 Trends and Forces
3.1 General Economic Forces
3.2 Supply Chain
3.3 Direct Sourcing and Own Brand Products
4 Competitors
5 References
North American Retail: this segment consists of the company's 1,555 stores in the US and 316 stores in Canada.
North American Delivery: Under this segment, Staples has its Contract, Staples Business Delivery, and Quill businesses. Its Contract operations serves mid-sized businesses and organizations through Staples Business Advantage and Fortune 1000 companies through Staples National Advantage. Staples Business Delivery operations combine the activities of the direct mail catalog business, Staples.com web site, and its Canadian Internet sites. Lastly, Quill is an Internet and catalog business that targets small and medium-sized businesses.
International Operations: Staples' International Operations has retail stores, catalog, and contract businesses in 23 different countries in Europe, South America, Asia, Australia. The company has 328 stores in seven countries.
Acquisition of Corporate Express
In July 2008, Staples completed the acquisition of Corporate Express N.V. ("Corporate Express"), one of the world's leading suppliers of office products to businesses and institutions. [6]
Business Growth
FY 2009 (ended January 30, 2010)[1]
Net income was down 8.3% to $739 million.
Net sales were $24.3 billion up 5.2% compared to the previous year. Sales growth was pushed by the North American Delivery and International Operations segments which increased by 8% and 13% respectively, but was offset by a 1.3% decline in the North American Retail segment due to a 2% decline in comparable store sales and lower average order size.
Trends and Forces
General Economic Forces
Domestically, the demand for office products is correlated with many different measures--white collar employment, small business spending, and national GDP--which are all indicators of the overall health of the macro-economy. In a sluggish economy, consumers and businesses cut back on spending to save money and tend to purchase fewer supplies, hurting the demand for Staples' products. A high white-collar unemployment rate also decreases the demand for office supplies. Despite economic pressures, Staples was able to have positive sales growth in 2009.
One hedge against a dependence on the domestic economy is growth in the company's international business, especially in developing countries like China and Brazil where economies are growing and no established office supply retailer dominates.
Supply Chain
Staples' standard superstore is significantly smaller than those of Office Depot or OfficeMax and houses much less of its inventory on-site. Instead, Staples operates 4 distribution centers across the United States to supply its retail stores on a timely basis and keep a stock of backup inventory. Part of Staples' efficiency comes from this distribution network operating in conjunction with Staples' small store format. Hence, Staples saves significantly on leasing costs, and has greater leeway to place stores in the most effective locations near their target customers.
The comparatively larger size of distribution centers allows Staples to make larger purchases with volume discounts, and their close relationships with vendors allows the time of delivery to match closer with demands so goods don't take up floorspace in distribution centers. This centralized handling and receiving system leads to significant savings on administrative and labor costs, and allows store associates to concentrate on store presentation and customer service.
Direct Sourcing and Own Brand Products
Staples offers a bevy of private label products and has begun directly sourcing many products (i.e. purchasing directly from manufacturers instead of through distributors). Private label products are usually priced lower for consumers than comparable national brands, yet offer higher profit margins to the retailer than brand name items.
Competitors
Staples is the world's largest office products company.
In the office supply market Staples has three main competitors:
Office Depot (ODP)
Officemax (OMX)
Lyreco
Staples also competes against mass merchants such as Wal-Mart (WMT), warehouse clubs like Costco Wholesale (COST), and computer and electronics superstores like Best Buy (BBY).
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.
The L in the logo is a stylized staple.
Staples Inc. (NASDAQ:SPLS) is the world's largest office products company, generating $24.3 billion in sales in 2009, up 5.2% from 2008.[1] Not only is the company ahead of its closest competitors in terms of revenue -- Office Depot (ODP) had revenue of $12.1 billion (a 16% decline))[2] and Officemax (OMX) had sales of $7.2 billion (down 12.8%)[3] -- but it is the only one to have positive profits in 2009 -- Staples profits were $739 million.
While Staples is the overall leader, it has embarked on several initiatives to extend its lead. For its physical retail locations, the company has significantly remodeled older stores while introducing smaller store formats in less-populated areas. To increase its margin, Staples has increased the mix of private label offerings (i.e., Staples brand products) and emphasized the purchase of products directly from manufacturers instead of distributors.
In 2008, Staples acquired Corporate Express N.V., one of the world's leading suppliers of office products to businesses and institutions, with hopes to increase its presence in the international market. The acquisition has also helped the company's performance in the sluggish economy as it put less pressure on the company's North American retail business.
Company Overview
Products[4]
Office Supplies and Services (47.9% of net sales)
Business Machines and Related Products (31.8% of net sales)
Computers and Related Products (15% of net sales)
Office Furniture (5.3% of net sales)
Operating Segments[5]
Contents
1 Company Overview
1.1 Products[4]
1.2 Operating Segments[5]
1.3 Acquisition of Corporate Express
2 Business Growth
2.1 FY 2009 (ended January 30, 2010)[1]
3 Trends and Forces
3.1 General Economic Forces
3.2 Supply Chain
3.3 Direct Sourcing and Own Brand Products
4 Competitors
5 References
North American Retail: this segment consists of the company's 1,555 stores in the US and 316 stores in Canada.
North American Delivery: Under this segment, Staples has its Contract, Staples Business Delivery, and Quill businesses. Its Contract operations serves mid-sized businesses and organizations through Staples Business Advantage and Fortune 1000 companies through Staples National Advantage. Staples Business Delivery operations combine the activities of the direct mail catalog business, Staples.com web site, and its Canadian Internet sites. Lastly, Quill is an Internet and catalog business that targets small and medium-sized businesses.
International Operations: Staples' International Operations has retail stores, catalog, and contract businesses in 23 different countries in Europe, South America, Asia, Australia. The company has 328 stores in seven countries.
Acquisition of Corporate Express
In July 2008, Staples completed the acquisition of Corporate Express N.V. ("Corporate Express"), one of the world's leading suppliers of office products to businesses and institutions. [6]
Business Growth
FY 2009 (ended January 30, 2010)[1]
Net income was down 8.3% to $739 million.
Net sales were $24.3 billion up 5.2% compared to the previous year. Sales growth was pushed by the North American Delivery and International Operations segments which increased by 8% and 13% respectively, but was offset by a 1.3% decline in the North American Retail segment due to a 2% decline in comparable store sales and lower average order size.
Trends and Forces
General Economic Forces
Domestically, the demand for office products is correlated with many different measures--white collar employment, small business spending, and national GDP--which are all indicators of the overall health of the macro-economy. In a sluggish economy, consumers and businesses cut back on spending to save money and tend to purchase fewer supplies, hurting the demand for Staples' products. A high white-collar unemployment rate also decreases the demand for office supplies. Despite economic pressures, Staples was able to have positive sales growth in 2009.
One hedge against a dependence on the domestic economy is growth in the company's international business, especially in developing countries like China and Brazil where economies are growing and no established office supply retailer dominates.
Supply Chain
Staples' standard superstore is significantly smaller than those of Office Depot or OfficeMax and houses much less of its inventory on-site. Instead, Staples operates 4 distribution centers across the United States to supply its retail stores on a timely basis and keep a stock of backup inventory. Part of Staples' efficiency comes from this distribution network operating in conjunction with Staples' small store format. Hence, Staples saves significantly on leasing costs, and has greater leeway to place stores in the most effective locations near their target customers.
The comparatively larger size of distribution centers allows Staples to make larger purchases with volume discounts, and their close relationships with vendors allows the time of delivery to match closer with demands so goods don't take up floorspace in distribution centers. This centralized handling and receiving system leads to significant savings on administrative and labor costs, and allows store associates to concentrate on store presentation and customer service.
Direct Sourcing and Own Brand Products
Staples offers a bevy of private label products and has begun directly sourcing many products (i.e. purchasing directly from manufacturers instead of through distributors). Private label products are usually priced lower for consumers than comparable national brands, yet offer higher profit margins to the retailer than brand name items.
Competitors
Staples is the world's largest office products company.
In the office supply market Staples has three main competitors:
Office Depot (ODP)
Officemax (OMX)
Lyreco
Staples also competes against mass merchants such as Wal-Mart (WMT), warehouse clubs like Costco Wholesale (COST), and computer and electronics superstores like Best Buy (BBY).
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