Romney said he and the rest of the board rode Stemberg hard. They wanted him to hire a chief operating officer with serious retail experience who could manage the operational issues.
Stemberg resisted for a time, perhaps fearful the new executive would replace him, Romney speculated. Meanwhile, Staples executives botched some presentations to the board, and yet another new store launch, in Port Chester, N. When Stemberg and supermarket magnate Leo Kahn, then Staples chairman, proposed an expensive new distribution center, some board members grew furious. In fact, Adler was so frustrated, he invested in a Staples competitor, Office Depot in Florida, and suggested that they simply run Staples out of business, Romney recounted.
Romney went to New York to meet with Adler and try to talk him out of doing anything to harm Staples. Adler could not be reached for comment. After that experience, Bain would institute rules barring co-investors in deals from backing competing companies. But Romney had to learn that the hard way. Over the next few years, Staples grew to 24 stores and 1, employees.
The plan was to take the company public in if it was profitable. Sears was interested in acquiring the company and sent representatives to meet with Stemberg and Romney. He did.
More accurately, he convinced a bunch of people with a lot of money that Staples' business model would work. He also put in a few shifts at the first store.
Not long after, supermarket executive Thomas G. Stemberg approached Bain with an idea. According to Staples company lore, Stemberg was working on a business proposal over a holiday weekend when his printer ribbon broke. When Stemberg went looking for a venture capital, he got laughed out of offices all over Boston.
Staples began work on its ,square-foot processing and distribution center in Putnam, Connecticut, in The decision to proceed with this project aroused controversy among Staples' management because the investment meant that the company would postpone becoming profitable for an even longer period of time.
By the end of the year the company had opened a total of nine stores that were clumped in the New York and metropolitan Boston areas. Of those who redeemed this offer, company data indicated that more than half would return to make future purchases. In its rapid Northeastern expansion, the company sought to lock up prime retail locations throughout the region so that competitors would have difficulty establishing their own stores.
The number of Staples stores had grown to 23 by the beginning of Whenever Staples opened a new store, the company bought a list of all the small businesses located within a minute drive of the outlet. Buyers of office supplies from these firms were then contacted by telemarketers who announced the store's opening and garnered data about the buyers' purchasing habits.
In return they received a coupon for free copy paper that would hopefully bring them into the store and spur word-of-mouth advertising. In addition, the company offered customers a free Staples card that offered discounts on goods purchased.
When customers filled out a card application, the company got data about the nature of their businesses. The numeric code on the card also enabled Staples to track their purchases precisely. All of this information was collated at the company's headquarters on a daily basis. In February Staples introduced its Private Label products--generic office supplies at exceptionally low prices.
This strategy was one that Stemberg had first implemented in the grocery business, when he introduced company-label groceries for Star Markets. Despite this strong growth in revenue, Staples had yet to make any earnings, although the company did turn in its first profitable quarter at the end of January These losses were caused by the high cost of the company's start-up and expansion as well as the strong competition the company faced.
As Stemberg had predicted, Staples had quickly been joined in the office supplies market by a host of imitators around the country. In mid the company slipped to second place in revenues behind Office Depot Incorporated; Office Club was making a strong showing in California; and retail giants Kmart and Ames were also deliberating a move into the stationery field.
To counter these threats, Staples continued its rapid pace of new store openings. Building on these gains, the following year Staples moved to centralize its Northeast delivery operations through a hub-and-spoke system set up with its Putnam facility at the center.
This warehouse was augmented with a 32,square-foot delivery distribution center. The new system allowed Staples to set up a toll-free line for orders, which were then shipped for delivery the next day.
The operation was dubbed Staples Direct. In July the company also commenced operations in a new market, southern California. Staples made its inroad into this competitive field with three stores located in Orange County, California, and a separate California distribution facility. Staples had targeted Orange County because of its high number of small businesses and growing economy, viewing its move into this area as the first step of a planned store California roll-out. Staples followed its West Coast expansion with the introduction of a new retail concept, called Staples Express.
The first of these stores was opened on Court Street in the heart of Boston's financial district. With a space only a third as large as the company's suburban stores, this facility stocked 2, items, or half of the usual complement, which were sold at the same low prices.
Staples Express was designed to appeal to the small business operator in an urban area and was geared to quick trips and impulse buying on lunch hours and after work. Customer purchases were typically small, being no bigger than what a person could carry.
The unveiling of this prototype was part of the company's strategy to dominate the office supplies market through three distribution channels: the suburban superstore, the urban ministore, and phone-in direct delivery service. Also in Staples began to buy its products overseas. To conduct international buying the company formed a subsidiary called Total Global Sourcing, Inc.
Staples accelerated its California operations the next year when it bought ten Los Angeles stores from defunct superstore operator HQ Office Supplies Warehouse and converted them to Staples stores.
Staples had now moved into direct competition with its biggest rival, Florida-based Office Depot. That year Staples made additional progress in its campaign to expand overseas.
The company bought a 48 percent interest in MAXI-Papier, operators of five office superstores in cities around Germany. Staples also signed a partnership agreement with Kingfisher plc to open office superstores in the United Kingdom.
In Staples celebrated the opening of its th store, and at that time the company announced plans for an additional store openings over the next two years. This ambitious schedule was set despite fluctuations in the price of Staples' stock. Wall Street had lost confidence in the company in early after Staples' two largest rivals embarked upon a rapid string of acquisitions, while Staples demonstrated difficulty rolling out a new line of personal computer products.
To redress these problems, Staples pared down the number of machines and software programs it offered, to create a more manageable department. In addition, the company began to make a number of acquisitions of its own. The former company boasted a nationwide distribution system. In July, the company announced that it would buy D. MacIsaac, Inc. The remodeling effort featured wider aisles, bigger in-store signs, and improved lighting.
0コメント