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6. S T A P L E S
 Andrew Marks, of Wayland, purchases items from sales associate Nora Kofi-Fleyn in the Staples' Natick store. (Globe Staff Photo / Pat Greenhouse) |
Putting focus on small businesses yields results
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By its own account, Staples Inc. (SPLS) enjoyed a "phenomenal year" in 2002. Promoted to chief executive early last year, Ron Sargent implemented a back-to-basics strategy that yielded almost immediate results.
Based in Framingham, Staples is a retail pioneer in office products. Today it has about 1,500 stores and also sells through catalogs and on the Internet. In addition, Staples operates a delivery business for corporate customers. Its store customers fall into two groups: average consumers and small business operators.
For office-products chains, average consumers tend to be a fickle group; they're as likely to shop for pencils and paper clips at a Wal-Mart or a BJ's Wholesale Club. As the economy weakened, Staples decided to concentrate on the small-business operators that deliver the bulk of its profits. To that end, it tweaked its store format to make shopping easier for its best customers, and the chain eliminated many low-margin items from its merchandise mix.
Rival Office Depot Inc. has tried a similar strategy, but strong execution has helped set Staples apart from Office Depot and the third player in the office-products superstore space, OfficeMax Inc., said Brian Postol, an analyst with A.G. Edwards & Sons.
Postol added that Staples's locations also give it an advantage over its two rivals.
"Their real-estate store portfolio is much better than the other two guys," Postol said of Staples.
For fiscal 2002, Staples revenue grew 8 percent to $11.6 billion. Net income jumped 68 percent to $446.1 million.
CHRIS REIDY
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