Staples 2014 Annual Report Download - page 39

EXECUTIVE COMPENSATION AND COMPENSATION DISCUSSION AND ANALYSIS
www.staplesannualmeeting.com STAPLES 35
Business Overview
Staples provides products and services that serve the needs
of business customers of all sizes and consumers through a
highly complex, multi-channel business in 25 countries.
We operate three business segments. The North American
Stores & Online segment offers easy-to-shop stores and
websites. Our North American Commercial segment consists
of the U.S. and Canadian businesses that sell and deliver
products and services directly to businesses, including Staples
Advantage and Quill.com. Finally, our International Operations
segment consists of businesses in 23 countries in Europe,
Australia, South America and Asia.
North American
Stores & Online
46%
of 2014 Sales
฀฀1,679 stores in North America
฀ One of the largest e-Commerce
players in North America
37%
of 2014 Sales
฀฀฀฀
channel: Staples Advantage and
Quill.com
17%
of 2014 Sales
฀ Contract, retail, and catalog
operations in 23 countries outside
the US and Canada
฀ 74% Europe, 19% Australia, 7%
High Growth Markets
North American
Commercial
International
Operations
Performance Overview
FY14 Performance Highlights
The needs of our customers are rapidly changing. Over the
past several years, demand for office supplies, computers,
business machines and technology accessories has been
under pressure. The company is engaged in a strategic
reinvention program focused on building scale and credibility
in categories beyond office supplies, accelerating growth
in Contract and staples.com, enhancing our copy and
print offering, optimizing our retail store network, building a
stronger connection between our online and retail businesses,
stabilizing Europe, and aggressively reducing expenses to
fund investments in key growth initiatives.
These reinvention priorities are designed to position the
company to generate long-term sales and earnings growth.
The Committee sets rigorous financial metrics tied directly to the
success of our reinvention program and the creation of long-term
shareholder value in a highly competitive industry.
During 2014 the company made progress against many of our
key reinvention goals:
• Achieved more than $200 million of growth in categories
beyond office supplies in North America
• Added more than 100 category specialists which
supported double-digit sales growth in our $3.4 billion
beyond office supply business in North American Contract
• Invested heavily in e-commerce capabilities, talent, and
business customer acquisition in staples.com, which
drove 8% local currency sales growth
• Over the past two years expanded our assortment
on staples.com from 100,000 products to well over
1,000,000 products
• In copy and print, achieved high single-digit same store
sales growth and double-digit sales growth online in copy
and print
• Acquired PNI Digital Media, a copy and print software
company that dramatically enhances our offering of
personalized products
• Closed 169 stores in North America and downsized
and relocated 23 stores to our highly productive 12,000
square foot format
• Increased the coordination between our retail stores and
staples.com with the launch of Buy Online, Pickup in Store,
and enhancements to our in-store staples.com kiosks
• Stabilized Europe sales and earnings and took aggressive
actions to reduce costs, streamline the organization, and
improve the customer experience
• Eliminated more than $250 million of global expenses
• Returned approximately $500 million to shareholders
through cash dividends and share repurchases
• In 2015, announced our plans to acquire Office Depot,
which we believe will create significant value for our
shareholders and customers and better position us to
accelerate our reinvention and more effectively compete
against a wide set of competitors in office supplies and a
range of categories beyond office supplies
Total shareholder return (TSR) improved in fiscal 2014,
฀ ฀ ฀  success with the reinvention
strategy ฀ ฀ ฀ ฀ ฀ ฀
industry consolidation.
Total Shareholder Return Staples S&P Retail Index
1-year +35% +20%
3-year +18% +98%