Staples cranks up its copy business, sales growth

When Staples Inc. realized that an average Kinko's Copy Center made about $2 million a year -- or six times more than Staples's typical copy business -- the Framingham office supplies chain knew it needed to crank up its game.

So Staples took on the king of copies, adding capabilities like wide-format printing, color printing, and Internet-based document acceptance at its 1,780 stores worldwide. During the last year, sales at Staples copy centers grew rapidly and it expects to do $1 million in copy business per store within the next five years.

''With more than 5 million customers coming through our stores each week, we thought we could do a lot more business," Staples chief executive Ronald L. Sargent said. ''We really stepped on the gas."

Beyond the copy centers, Staples looked for other areas to grow -- places where competitors weren't dominating the market and where the margins were good. The company turned to its delivery business, boosting its sales force 25 percent to aggressively increase sales through catalog, Internet, and business-to-business sales, all of which deliver better profits than retail outlets with long-term leases and lower-margin technology products.

At the same time, Staples expanded its private brand of products, introducing a line of shredders and a combination lock that uses letters instead of numbers, called the Staples WordLock, which quickly became its best-selling combination lock. In 2005, private labels, attractive for retailers to cut out middle-man markups, jumped to 18 percent of total sales from 15 percent the prior year.

The results: Staples sales jumped 11.3 percent to $16 billion last year, and moved up two notches to ninth place on The Globe 100 list.

Several other of the state's top merchants, including TJX Cos., the owner of T.J. Maxx and Marshalls, BJ's Wholesale Club Inc., and Talbots Inc., beat the industry's growth. Nationwide retail sales last year increased 6.1 percent, according to the National Retail Federation.

At Talbots, the company sought to improve productivity by offering more styles such as skirts, pants, and tops for its Talbots Woman and Talbots Petite businesses, helping it to achieve a double-digit sales increase at stores open at least a year, according to Margery Myers, a company spokeswoman. Talbots, which agreed this year to buy out Quincy retailer J. Jill Group Inc., saw revenues jump 6.5 percent in 2005.

Meanwhile, BJ's worked to increase sales of higher-margin items, including fresh foods, and like Staples, expand its assortment of privately manufactured brands, such as World Connoisseur, a line of frozen gourmet prepared meals and entrees, and Living Home, a line of moderately priced products for the home, garden, holiday, and outdoors. Private labels accounted for 12 percent of sales last year, up from 9 percent in 2004. The company boosted its sales 7.8 percent.

Revenues for TJX grew 7.7 percent. It pulled back growth plans for the A.J. Wright and Home Goods chains, however, opting to open new stores only in metropolitan markets where the chains already operate and are doing well, such as Boston, Chicago, and southeastern Florida.

The off-price retailer, which brought back Ben Cammarata to serve as acting chief executive, also concentrated on buying merchandise very late in the season and keeping a fresh flow of product in the stores every day. In recent years, the company had strayed from that strategy, to a certain extent, purchasing earlier in the season and in greater quantities -- which makes for less profitable deals, Lang said.

''We have injected new energy into the organization and we're more results-oriented than we have been over the last several years," Lang said. ''The organization had a wake-up call."

Jenn Abelson can be reached at abelson@globe.com.