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STAPLES 20-year high
Staples celebrates two decades with historic remote opening of Nasdaq
FRAMINGHAM-
Staples Inc. made it look easy yesterday, marking its 20th anniversary
with a remote opening of the Nasdaq Stock Market, a polished, festive
event for a $16 billion company rooted in paper clips and ink
cartridges.Staples, the world’s largest office products superstore, is
the first Northeast company to remotely open the electronic stock
market, and Nasdaq President and Chief Executive Officer Robert
Greifeld was on hand to mark the occasion, along with hundreds of
Staples employees – including some who trace their history to the
company’s first store in Brighton in 1986.Staples President and Chief
Executive Officer Ronald L. Sargent, joined on the podium by more than
two dozen longtime employees, opened Nasdaq trading by signing an
electronic screen and pushing a button, an event broadcast live by CNBC
and on Nasdaq’s 96-screen video wall at 4 Times Square in New York
City, and across its seven-story video tower in the square.A few
minutes before the 9:30 a.m. event, Nasdaq officials cued their theme
music and urged the more than 300 employees lining the floor and stairs
in Staples’ lobby to turn off their cell phones. Four cameras were
trained on the event, and both Mr. Sargent and Mr. Greifeld spoke about
the company’s history as the minutes ticked down.The prepared remarks
ended at 9:29 a.m. and Staples’ employees, wearing commemorative red
sweatshirts, clapped for the next 90 seconds as Mr. Sargent used an
electronic pen to put his signature across a screen inside the
podium.Pens and paper have been at the forefront of Staples’ success, a
retailer that grew profitable by making it easy for other businesses to
purchase supplies, business machines, technology and services.Founded
by former supermarket executive Thomas G. Stemberg, Staples had an
untested but appealing concept when Mr. Sargent came aboard in 1989,
the same year the company went public on the Nasdaq.“A lot of these
people had no idea what they were getting into,” Mr. Sargent said. “I
certainly got lucky buying into Tom’s vision.”While being recruited by
Mr. Stemberg, Mr. Sargent said he was told the company might top $1
billion in sales, a forecast he cut by 50 percent when discussing with
his wife whether to relocate from Ohio to Massachusetts.“I was at a $25
billion company in my hometown and thinking about coming to this little
startup,” he said with a laugh. “It took us a while to kind of sort
through it.”Early investors in Staples have been well rewarded, as the
company has had eight, 3-for-2 stock splits. A dollar invested in
Staples in 1989 would now be worth $32.James K. Shea of Franklin, a
divisional program sales manager, recalled being somewhat skeptical
when he interviewed for a job with Mr. Stemberg in 1987.A retailer
selling office products to small businesses wasn’t something that
initially sounded like a successful business plan, he said.“I kept
saying to myself, ‘Who was going to walk into a supermarket and buy
paper clips?’ ” Mr. Shea said.His interview was conducted at Staples’
headquarters, which at the time was in a former King’s Department Store
in Newton. Mr. Stemberg greeted Mr. Shea in an office that featured an
old metal desk and two orange plastic chairs.“He said he wanted to show
investors that all of the money was being poured into the stores,” Mr.
Shea said.Those stores now total more than 1,700, a sales channel that
will likely flatten out over the next eight years, Mr. Sargent said in
an interview.Sales from the company’s delivery services to homes and
businesses will likely surpass retail sales by 2013. Internet sales
allow the company to service every ZIP code in the country, something
that’s not possible through traditional retail stores.Ink
cartridges remain Staples’ No. 1 product and it has done well by
offering products associated with personal computers and laptops.
Digital cameras were a hot seller for several years, but that market
has started to become saturated. Wireless communication equipment is a
growing part of Staples’ product sales and it has recently launched its
own branded paper shredder.For the first quarter ended April 29,
Staples reported net income of $186.1 million, or 25 cents per share,
up from $147.1 million, or 20 cents per share, for the same period a
year earlier.Mr. Sargent said the company does a good job selecting
products, but there have been a few items that didn’t meet
expectations. Razer scooters were heavily promoted but turned out to be
something Staples customers didn’t find appealing. In the early days of
the company, a globe had to be discontinued after it was noticed the
names of some cities in the United States were misspelled, he said.The
rising cost of paper has been passed on to Staples’ customers twice
this year but to date, the company has not had to implement any fuel
surcharges, Mr. Sargent said. Sales rose 9 percent in the most recent
quarter, to $4.2 billion, as business customers stepped up demand for
printing services, he said.Mr. Greifeld said Staples is the epitome of
a Nasdaq company, an innovative business launched by savvy
entrepreneurs“They’re simpatico with our approach to stock trading,”
Mr. Greifeld said. “We revolutionized trading with our electronic
approach and Staples has revolutionized the office products market.”The
Nasdaq listing has also been good for Staples, Mr. Sargent said.“We
think it fits our image,” he said. “We’re looking at fast-growing
entrepreneurs. That’s our customer.”Staples shares lost 10 cents, to
close at $23.85, yesterday on the Nasdaq.
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