Staples 2012 Annual Report Download - page 73

1
PART I
Item 1. Business
Staples, Inc. and its subsidiaries (''we'', ''Staples'' or the ''Company'') is the world's leading office products company. We
are committed to providing superior value to our customers through a broad selection of products, easy to use websites, an integrated
retail and online shopping experience and a wide range of copy and print and technology services. We pioneered the office products
superstore concept by opening the first office products superstore in Brighton, Massachusetts in 1986 to serve the needs of small
businesses and consumers, and we currently serve businesses of all sizes and consumers in North America, Europe, Australia,
South America and Asia. Our delivery businesses account for a majority of our sales and many of our delivery customers place
their orders online, making Staples one of the largest Internet resellers in the world. We operate three business segments: North
American Stores & Online, North American Commercial and International Operations. Additional information regarding our
operating segments is presented in Management's Discussion and Analysis of Financial Condition and Results of Operations
contained in this Annual Report on Form 10-K, and financial information regarding these segments is provided in Note R - Segment
Reporting in the Notes to the Consolidated Financial Statements contained in this Annual Report on Form 10-K.
Strategy
We view the markets for the products and services we offer as large and diversified. We reach our customers through
contract, on-line, catalog and retail sales channels that are designed to be convenient. Our businesses attract different customer
groups with distinct purchasing behaviors. Our retail stores and Staples.com website target small businesses and home offices.
Our catalog customers are generally small businesses and organizations with up to 20 office workers. Our contract businesses
target mid-size businesses and organizations with 20 to 500 office workers, as well as Fortune 1000 companies. Our ability to
address customer groups with different needs expands our available market opportunities and increases awareness of the Staples
brand. Customers around the world often shop on our websites and in our retail stores, which differentiates our multichannel
offering from many of our competitors. This allows us to benefit from a number of important economies of scale, such as enhanced
efficiencies in purchasing, distribution, advertising, and general and administrative expenses.
During 2012, we realigned our organization by combining our North American retail stores and our public websites in
the United States and Canada, Staples.com, to provide a more integrated and consistent shopping experience for our small business
and home office customers. We are also currently engaged in a multi-year effort to reduce our retail square footage in North
America and Europe and restructure our European Operations. In addition, we initiated a multi-year cost savings plan to improve
efficiency and provide funding to accelerate our growth. Successful execution of our strategy will help us to accelerate our growth
and achieve our vision: every product your business needs to succeed.
North American Stores & Online
Our North American Stores & Online segment includes the company's retail stores and Staples.com businesses in the
U.S. and Canada.
Our strategy for North American Stores & Online focuses on offering easy-to-shop stores and websites with quality
products that are in-stock and easy to find, and courteous, helpful and knowledgeable sales associates to support customers across
all channels. Our goals are to continue to be a destination for core office supply categories like ink, toner and paper and to become
an authority for products and services beyond office supplies, such as facilities and breakroom supplies, copy and print and
technology services. Our associates are trained to deliver excellent service by engaging with customers and selling solutions.
Our North American Stores & Online segment consisted of 1,547 stores in the United States and 339 stores in Canada
at the end of fiscal 2012. We operate a portfolio of retail store formats, tailored to the unique characteristics of each location. The
“Dover” superstore represents the majority of our U.S. store base. The customer friendly ''Dover'' design appeals to the customer
with an open store interior that provides a better view of our wide selection and makes it easier to find products. In an effort to
improve store productivity and effectively manage our cost structure, we have reduced the size of our “Dover” store format over
time. We have developed a 12,000 square foot prototype that will improve store productivity and incorporate omni-channel features
to better address changing customer needs. We also operate smaller format stores designed for rural markets and dense urban
markets.
Staples.com includes the activities of our U.S. and Canadian Internet sites, as well as our direct mail catalog business.
Staples.com is designed to reach small businesses, home offices and consumers, offering next business day delivery for most
orders in the majority of our markets. One of our top priorities in Staples.com is to rapidly expand our assortment beyond office