Staples 2013 Annual Report Download - page 90

1
PART I
Item 1. Business
Staples, Inc. and its subsidiaries (''we'', ''Staples'' or the ''Company'') is a world-class provider of products and services
that serve the needs of business customers and consumers. We are committed to providing superior value to our customers through
a broad selection of products, easy to use websites and mobile platforms, 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 P - Segment Reporting in the Notes to the Consolidated Financial
Statements contained in this Annual Report on Form 10-K.
Strategy
In 2013, we launched our new tagline "Make More Happen" to highlight our vision: every product your business needs
to succeed. This reflects a multi-year effort to evolve our business to meet the changing needs of customers. We view the markets
for the products and services we offer as large and diversified. We reach our customers through contract, online, 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 public websites 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 larger regional customers and Fortune 1000 companies. Our ability to
address customer groups with different needs expands our market opportunities and increases awareness of the Staples brand.
Serving different types of customers in a global business 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.
Our top priorities are to expand our assortment in categories beyond office supplies, enhance our ecommerce platforms,
evolve our Contract selling model and accelerate growth in our services businesses. We are also engaged in a multi-year effort
to aggressively reduce costs to fund our growth initiatives. Additionally, we are focused on reducing our retail square footage in
North America and restructuring our European operations to streamline our businesses, drive efficiency and improve profitability.
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 readily available 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 technology products and services,
copy and print services, facilities and breakroom supplies, as well as a full assortment of industry vertical focused solutions to
serve businesses like restaurants, medical offices, and retail stores. Our associates are trained to deliver excellent service by
engaging with customers, focusing on solution selling, and encouraging customers to shop across channels.
We operate a portfolio of retail store formats, tailored to the unique characteristics of each location. Our North American
Stores & Online segment consisted of 1,515 stores in the United States and 331 stores in Canada at the end of fiscal 2013. In an
effort to improve store productivity and effectively manage our cost structure, we are closing, downsizing and relocating stores.
We recently announced that we will be closing up to 225 stores in North America by the end of 2015. In addition, over the past
few years we have reduced the size of our store prototype from 24,000 square feet to 12,000 square feet. Our new smaller store
format incorporates omnichannel features to better address changing customer needs, while generating over 95% of the sales we
generate in a 24,000 square foot store.
Staples.com and Staples.ca are 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 is to rapidly expand our assortment beyond
office supplies. We also continue to make investments in information technology to enhance our websites. Over the past year,