Staples Chairman and CEO Ronald L. Sargent is very confident in the steps the company has taken, and plans to take this year, to emerge as a stronger, more profitable entity.
“We’re making good progress re-inventing Staples,” Sargent said during the company’s May 20 first-quarter earnings conference call, according to Seeking Alpha. “During Q1, we continued to drive solid growth in North American Commercial. In Staples.com, we grew both sales and earnings. We achieved strong results in copy and print both in-store and online. And in Europe, we improved bottom line results for the third consecutive quarter. And we continue to focus on improving productivity by reducing our retail footprint and aggressively reducing cost across the country.”
Sargent discussed the Office Depot acquisition.
“They (Office Depot) have a solid understanding of our key integration objectives and have acknowledged the financial flexibility that the debt structure provides,” Sargent explained. “Next month Office Depot will be holding an Annual Meeting where shareholders will vote to adopt the merger agreement. We continue to develop our integration plans. While our top priority in 2015 is to achieve Staples’ standalone strategic objective, we’re also planning to hit the ground running once the deal is approved and closes. Our leadership team is working hard to develop our integration objectives and our principles and our approach, we're creating an integration management office to coordinate the integration planning process and establish integration teams while providing overall guidance as well as support.”
Sargent said four key integration success criteria have been identified
“One is to achieve our synergy targets,” he said. “Two is rapid decision-making. Three is high accountability for results. And four is clear internal and external communication on our progress. Our focus on these priorities as well as the integration expertise at both Staples and Office Depot position us, I think, extremely well to create significant value as one company. We remain highly confident in our ability to achieve more than $1 billion of net synergies over the three-year integration period and this target is net of any investments that we would make to provide increased value to our customers.”
Staples has improved the customer experience.
“During the first quarter, we leveraged our ecommerce expertise to modernize the user experience on StaplesAdvantage.com with a focus on driving growth beyond office supplies,” he said. “This new site is faster, it’s more personalized, and provides a more streamlined checkout experience. We rolled it out to more than half of our customers and early results are encouraging here. In Staples.com, we’ve invested heavily over the past two years to bring in new talent, improve the quality of our desktop and mobile experience, strengthen our omni-channel capabilities as well as sharpen our prices. This year our top priority is to generate returns on those investments. Our Q1 results reflect a more balanced approach to driving sales and earnings growth online and we expect to build on these results throughout 2015. While our investments will moderate this year, we remain focused on continuing to improve the customer experience on Staples.com. We’re improving the site design and speed, we’re increasing the relevance of our search function, and we’re streamlining the checkout process with a focus on making the overall shopping experience easier for new and repeat customers.”