Retailers Home Depot, Sears, Kohl's and JCPenney Among Winners of EPA Star Partner Awards

The US Environmental Protection Agency and Department of Energy will be hosting its annual Energy Star Partner of the Year awards in Washington, DC, on April 20. Of the approximately 16,000 companies who partner with the EPA on their broad-based energy efficiency program, 128 companies are being recognized as Energy Star Partners of the Year.

Retailers among the 128 winners include Home Depot, Sears, Best Buy, Kroger, Kohl’s, Food Lion, Staples and JC Penney. “Energy Star Partner of the Year Award winners are delivering advanced energy efficiency solutions that help American families and businesses save money by saving energy. Their efforts play an important role in protecting the environment by reducing greenhouse gas emissions, while also moving our nation closer to a clean energy future.” said Department of Energy Secretary Ernest Moniz. Adds EPA Administrator and event key note speaker Gina McCarthy, “Our Energy Star Partner of the Year award winners demonstrate that energy efficiency is a smart business decision that supports their bottom line, and helps their customers save money and energy.”

Source: Retailing Today

Staples to Buy Office Depot for $6.3 Billion

In an effort to better compete with online and big-box office supply retailers, Staples agreed to buy rival Office Depot in a $6.3 billion cash and stock deal. Staples said it started discussion with Office Depot in September, and the deal is expected to close by the end of 2015.

Amazon.com and Walmart have eaten into the sales of the office supply retailers.

Staples has market value of $11 billion, while Office Depot, its nearest rival, has a market value of $4 billion. Regulators denied Staples’ previous attempt to buy Office Depot in 1997 due to antitrust concerns. However, the FTC approved Office Depot’s $976 million acquisition of OfficeMax in 2013, citing increased competition in the office supply industry.

"This transaction delivers great value for our shareholders and creates a company ideally positioned to serve our customers and grow over the long term," said Office Depot CEO Roland Smith. "It is also an endorsement of our many accomplishments and the tremendous success we've had integrating Office Depot and OfficeMax over the past year. We look forward to bringing our experience and knowledge to the new organization."

"This is a transformational acquisition which enables Staples to provide more value to customers, and more effectively compete in a rapidly evolving competitive environment," said Ron Sargent, Staples' Chairman and CEO, in a statement. "We expect to recognize at least $1 billion of synergies as we aggressively reduce global expenses and optimize our retail footprint. These savings will dramatically accelerate our strategic reinvention which is focused on driving growth in our delivery businesses and in categories beyond office supplies."

Sources: Wall Street Journal, RetailWire

Staples Working To Stabilize Retail Business

August 20, 2014

Staples chairman and CEO Ron Sargent said that the company has more work to do to stabilize its retail business, following a 20% decline in net income to $81.88 million for the second quarter, from $102.53 million in the prior year.

Sargent added that the company will continue taking steps toward improving customer traffic, reduce expenses and close underperforming stores.

The company's results included $101 million of pre-tax restructuring and other related charges primarily associated with the closure of 80 stores, along with its previously announced plan to close approximately 40 stores in North America during the second half.

Sales declined 2% to $5.22 billion - above analysts' estimates.  Same-store sales at Staples North American stores decreased 5%.  E-commerce saw sales growth of 8%.

"We're accelerating growth in our delivery businesses as customers turn to Staples for more products beyond office supplies," said Sargent.

Staples forecast third-quarter adjusted earnings of 34 cents to 39 cents a share, excluding any potential impact on per-share earnings from restructuring and related activities.  The retailer plans to take a pretax charge of $40 million to $75 million in the third quarter stemming from restructuring.

Source: Retailing Today

Store Closures Hurt Staples In First Quarter

May 20, 2014

Store closures and weak demand for traditional office supplies and computers hurt Staples in the first quarter of fiscal 2014.

The company attributed a 44% drop in net earnings during the quarter to lower sales caused by store closures and a rise in the value of the dollar.  But according to reports, the office products company and second largest internet retailer in the United States is facing stiff competition from big box retailers such as Walmart and e-commerce giants such as Amazon.

Net earnings were $96 million for the quarter.  Net saes dropped 3% to $5.65 billion from $5.81 billion.

For the second quarter, the company anticipates further decreases in sales, which caused shares to drop 10%.

"We're making progress meeting the changing needs of our customers as we reinvent Staples," said chairman and CEO Ron Sargent.  "Despite a slow start to the first quarter, our results were in line with our expectations and we expect to build mementum throughout 2014."

Source: Retailing Today

Staples Digital Reinvention Results In 225 Store Closures

March 6, 2014

Ongoing weakness at Staples' North American retail division has resulted in the planned closure of 225 units as part of a larger expense savings program and increased emphasis on digital initiatives.

The store closure announcement, part of a larger plan expected to save $500 million by the end of 2015, was announced in conjunction with the release of fourth-quarter results and new insights regarding the company's online business.

Profits during the 13-week fourth quarter ended February 1 increased to $212 million, or  33 cents a share, compared to the prior year's 14-week fourth quarter, which saw profits of $78 million, or 12 cents a share.  Despite the profit improvement, the sales picture at Staples remained challenging during the fourth quarter.  During the period, total sales declined 3.8% to nearly $5.9 billion while sales at the North American Retail division declined 5.7% to $2.9 billion, excluding an extra week from the prior year reporting period.  Same-store sales declined 7% and operating profits for the division fell to $176 billion from $317 million.

According to the company, sales declines in business machines and technology accessories, office supplies and computers, were partially offset by growth in facilities and breakroom supplies, paper and copy and print.

The newly announced closures follow a net store count reduction of 34 units last year which left Staples with a total of 1,846 stores in the U.S. and Canada at year end.  Even with the elimination of 225 stores this year, Staples will continue to have a sizable retail footprint it can leverage to offer shoppers an omnichannel experience.

"A year ago, we announced a plan to fundamentally reinvent our company," said Ron Sargent, Staples' chairman and CEO. "With nearly half of our sales generated online today, we're meeting the changing needs of business customers and taking aggressive action to reduce costs and improve efficiency."

Sales at Staples.com increased by 10% during the fourth quarter as the retailer offered a dramatically expanded online assortment which increased to 500,000 products at the end of 2013 compared to 100,000 at the beginning of the year.

Sargent's assertion that half the company's total sales are generated online, while technically accurate, tends to overstate the situation with its physical stores.  That's because the company's digital penetration rate is skewed by the dynamics of its nearly $2 billion North American commercial division, which focuses on large corporate clients whose interactions with the company are virtually all online.

In addition to saving related to store closures, Staples said additional savings would come from unspecified initiatives in the areas of supply chain, labor optimization, non-product related costs, IT hardware and services, marketing, sales force and customer service.

Source: Retailing Today

Doody And Goodman In New Reinvention Roles At Staples

January 30, 2014

Two of Staples' senior most executives were given new responsibilities to bolster the company's re-invention efforts and competitive posture in a market that has become more challenging with the addition of a newly merged Office Depot and Office Max.

Staples elevated Joe Doody to the role of vice chairman from his prior position as president of the company's North American commercial division.  Filling Doody's role is Staples executive Shira Goodman who previously served as EVP of global growth.  Both will continue to report to long time Staples chairman and CEO Ron Sargent.

"Joe (Doody) has done a tremendous job leading our commercial businesses through a time of enormous change and growth.  His proven success and deep experience will be crucial to our reinvention as we continue to expand into new categories and build on our e-commerce and delivery capabilities to provide every product businesses need to succeed," Sargent said.  "Shira (Goodman) is an outstanding leader with unmatched experience across our company.  Her experience with our reinvention will be a huge asset as we continue to drive growth in our North American Commercial business by expanding into new categories, such as facilities and breakroom, technology, print, furniture and promotional products."

In his new role, Doody will lead Staples' strategic reinvention with responsibility for strategic planning and business development as well as the company's operations in Australia, New Zealand and high-growth markets.  Doody joined Staples in 1998 as president of what was known at the time as Staples Contract and Commercial.  He held that role until 2002 when he was named president of Staples North American Delivery.  He was named president of North American Commercial in 2013.

Goodman joined Staples in 1992 and prior to her recent role as EVP of global growth she served as EVP of human resources and EVP of marketing from 2001 to 2009.  Prior to 2001, Goodman served as SVP of StaplesDirect.com, the company's e-commerce and catalog operation.

The appointment of Doody and Goodman to new roles follows several other significant developments at Staples which are part of the company's reinvention efforts.  In early January, Staples unveiled a new branding campaign with the tagline, "make more happen," which replaced its long-running, "that was easy," tagline.  The company also made a subtle change to its logo.

The new campaign is designed to showcase Staples' expanded assortment, thus the "make more happen," positioning, whereas with "that was easy," the emphasisi tended to be on how Staples simplified customers lives.

"We're adding thousands of new products every day.  Our expanded product assortment appeals to businesses across a wide range of industries, from medical and restaurants to professional services and retail," Goodman said when the campaign launched.

Other recent reinvention moves are focused on the company's intellectual capacity.  For example, last fall Staples named Tom Conophy as its Chief information officer to oversee all aspects of the company's global IT organization.

"Tom (Conophy) is a creative and innovative leader, and his skills complement the talents of our IT leadership team as we build the systems and processes to support our strategic reinvention," CEO Sargent said at the time.

One of the biggest commitments the company made to stay on the leading edge of technology related to the creation last September of a new e-commerce development center in Seattle.  The move was designed to help the company attract top talent in the areas of engineering, product management, usability, analytics and online merchandising.

Staples is changing the way customers shop online," said Faisal Masud, Staples EVP of global e-commerce.  "Seattle is an innovation hub rivaling Silicon Valley and features some of the world's biggest technology companies.  Staples new Development Center will allow us to tap into the wide range of talented engineering and e-commerce professionals on the West Coast."

Source: Retailing Today