The paper chase
With savvy marketing, Staples adds a cool factor to the mundane world of office supplies
Staples chief executive Ron Sargent was not a big fan of the NBC hit comedy series, The Office, until the show about a fictional Scranton paper company started talking about the Framingham office-supply behemoth as its main rival.
Staples quickly realized an opportunity and struck a deal to get the business written into the show, including an episode when its new MailMate shredder was used to slice through compact discs , credit cards, and, ultimately, help shred a salad for lunch.
"We don't take ourselves too seriously," says Sargent, 51. "From a CEO's perspective, it's pretty gratifying if we can become part of popular culture."
Indeed, Staples has managed to achieve a certain level of cool for a fairly staid business founded on selling paper clips and other office basics. Last year, Staples hired High School Musical star Ashley Tisdale , its first celebrity spokeswoman, as a way to cater to the teenage taste land and recorded its best back-to-school season ever. Analysts credit Sargent with leading Staples to its biggest profits while encouraging a spirit of creativity and entrepreneurship. In 2006, Staples revenue increased 13 percent to $18 billion, the best year in the company's 20-year history.
"Big companies can easily be weighed down by bureaucracy, and an overemphasis on playing it safe and looking for ways to keep costs down to the point that it stifles creativity," says Michelle Bogan , a retail strategist with consulting firm Kurt Salmon Associates. "But Staples has done a good job of balancing and creating an atmosphere that encourages creativity and pushing the envelope."
Sargent took on the top job five years ago as the company's profits were shrinking. He succeeded Staples founder Thomas Stemberg, who stepped down in 2002 and later said he was pushed out of the business. But despite Stemberg's misgivings with his own treatment, the founder has said he's "proud as a peacock" with how Staples's succession has gone.
For Sargent, 2006 was a banner year, when the company achieved its goal of having 20 percent of sales come from the company's private label -- and higher margin -- products. The office supply chain kept up its real estate growth, opening 100 stores in North America, including new markets in s outh Florida, the home base of rival Office Depot. Outside the United States, the company finally started to turn around its European sales and expand its business in China, even signing on to serve as the official office furniture sponsor of next year's Olympics in Beijing.
Michael Baker , a retail analyst with Deutsche Bank Securities, praised Sargent for building "one of the deepest and top management teams in retail that gets the big picture."
For Sargent, it all comes down to consumers, giving them want they want and making it easy.
"If you serve customers well," Sargent says, "your brand gets recognized."
Jenn Abelson can be reached at abelson@globe.com. ![]()