Staples Teams Up for Home Office - Analyst Blog
September 23 2011 - 1:29PM
Zacks
Staples Inc. (SPLS), a leading retailer of
office products and services, has entered into a partnership with
Martha Stewart Living Omnimedia Inc (MSO) and the
office and consumer products group of Avery Dennison
Corporation (AVY) to retail a new product line for the
home office.
Considering the current macroeconomic environment and sluggish
job market, it is considered to be a smarter move as the decline in
business and consumer spending and weak credit markets have slowed
the demand for big-ticket items such as business machines and other
durable products.
Further, the home office market offers a huge potential for
Staples and will augment sales owing to its size. Further, there
are no such big brands which offer goods to cater to the needs of
the home office space.
The new product line will hit the markets by early 2012 and
includes 300 products designed exclusively for home office.
Being a leading retailer of office products and services,
Staples is better positioned than its competitors to sustain its
growth based on margin expansion, effective merchandising, and
growth prospects across its retail, delivery and international
divisions.
Staples is making prudent investments in the highly fragmented
North American retail market to expand its business technology, and
copy and print services that generate higher profit margins, while
also boosting its core supplies categories like ink and toner. The
company is also focusing on controlling expenses.
Staples faces stiff competition from office supply retailers,
such as OfficeMax Inc. (OMX) and Office
Depot Inc. (ODP) and warehouse clubs, discount stores,
mass merchandisers, computer and electronics superstores on
attributes, such as store format, pricing strategy and in-stock
consistency. This may weigh upon the company’s results.
Currently, Staples has a Zacks #3 Rank, which translates into a
short-term Hold rating.
AVERY DENNISON (AVY): Free Stock Analysis Report
MARTHA STWT LIV (MSO): Free Stock Analysis Report
OFFICE DEPOT (ODP): Free Stock Analysis Report
OFFICEMAX INC (OMX): Free Stock Analysis Report
STAPLES INC (SPLS): Free Stock Analysis Report
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