With annual sales of more than $2.92 billion, cataloger/retailer Staples is already a giant in the office supplies market. But that doesn’t mean the Framingham, MA-based company doesn’t want to get bigger still.
To that end, Staples agreed on Aug. 22 to buy the mail order unit of Guilbert, an office supplies cataloger located just outside Paris, from Paris-based Pinault-Printemps-Redoute (PPR) for approximately $810 million. The acquisition follows Staples’ July purchase of $168 million Medical Arts Press, a multititle mailer of office supplies for medical practitioners.
“We have been looking for different ways to grow the business top line as part of [president/CEO] Ron Sargent’s plan,” says Staples spokesperson Deborah Hohler. “We find Europe to be a major growth platform for us — it’s the second largest office supplies market to the U.S.”
Guilbert sells to small businesses in France, Spain, Italy, and Belgium. The only country outside of the U.S. in which Staples operates is the U.K.; its $1.1 billion Quill catalog division sells only in the U.S.
“We’ll look at Guilbert’s purchasing practices,” Hohler says. “It will add some nice volume purchasing for us to get better product pricing. In the long run, it could possibly help us worldwide as well.” She adds that Staples has no plans to make immediate changes in the Guilbert brand, such as changing the name to Staples.
Bottom line growth too
Though Sargent may be focusing on growing revenue, Staples isn’t ignoring the bottom line. In mid-August, the company posted a 47% increase in second-quarter income, to $59.5 million on $2.43 billion in revenue, by improving its margins on supplies aimed at small businesses.
While Staples’ overall revenue for its second quarter ended Aug. 3 increased 5%, to $2.43 billion from $2.31 billion, Quill’s sales grew 7%, helped in large part by its new 10-person field sales force, which it quietly launched this spring.
The sales force targets small and midsize businesses only in the Chicago area for now, giving out Mrs. Fields cookies on all sales calls as a perk. “We thought there were a lot of customers who would respond better to a salesperson than to a catalog,” says Quill president/CEO Larry Morse.
Morse is unsure whether Quill will take the field sales effort national. “This trial is very much in the early stages, but it seems positive — albeit with no measurable impact yet,” he says. “I have no idea how big or when there will be a big impact. If it works, we could do anything, but that remains to be seen.”
The introduction of the sales force brings Quill full circle. Brothers Jack and Harvey Miller, both now retired, founded the company in 1956 by peddling office products door-to-door.