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STAPLES NEWS

SCC Hits the Books
While students and others enjoy summer vacations, Staples Contract and Commercial (SCC) has been hitting the books hard. Several major accounts have been added in recent months, states Neil Ringel, Vice President & General Manager of SBA - New York and Washington. Among new accounts is the New York Public Library with some 90 branches located throughout the City's five boroughs. "We've helped them come into the 20th century," said Neil, "assisting them with closing down an outdated central supplies department and migrating the Library to our electronic system." Under the old system, the Library maintained a central supplies stocking facility that occupied nearly an entire building and required clerks and drivers to handle distribution. Staples Associates presided over the conversion to SCC's computerized ordering system that now provides next-day delivery to any Library branch. The account represents approximately $1 million annually in new sales for SCC.

Also new to the SCC roster are Vanderbilt University in Nashville, TN and Rutgers University in New Brunswick, NJ, each expected to add nearly $2 million in sales annually. Vanderbilt, too, is a situation where we assisted the customer in converting from an expensive, outmoded approach to a state-of-the-art electronic system, reports Neil. The new system will save these institutions a fortune by eliminating their need to maintain a supplies infrastructure, he added.

In the corporate arena, SBA - New York is proud to announce the addition of Colgate-Palmolive to its customer roster. Locations being served include the company's large New York City and Piscataway, NJ sites.

"One new account that really excites us," said Neil, "is the Washington Post, one of the nation's best known newspaper companies. It joined ranks with SBA - Washington just last month." The Post will be using SCC's new CD Link, an electronic commerce ordering system. CD Link enables customers to browse through a CD-ROM version of the Staples catalog, select items they need, and then with a few keystrokes zap their order directly to an SCC computer for next day delivery. The Post account is anticipated to add approximately $600,000 in annual sales.

Does Not Compute!
Facing sales volumes that just donÕt add up, leading PC makers are testing the circuits of selling direct to end users. The question for others affiliated with the industry, including shareholders, analysts, and retailers like Staples, is where will it all lead?

Computer Retail Week, an industry trade publication, announced in July that several manufacturers, including Packard Bell NEC, Compaq, and Sony, are planning to launch direct sales initiatives that target consumers, businesses, or both, a process that curcumvents the retail channel. For manufacturers, however, direct selling is not entirely new. Many have been using the approach to sell refurbished machines returned by customers who purchased them new and found them defective. Now, computer makers are taking a further step by reviewing strategies and formulating plans to also use the direct sales channel for first-line merchandise.

According to Philo Pappas, Vice President - Division Merchandise Manager for computers, ÒWe are obviously unhappy with the situation, and are strongly discouraging these vendors against bypassing retailers and going direct to end users. We need to help manufacturers understand that this could be detrimental to them in the future, and that, as a retailer, we can provide more service to the customer.Ó Staples is watching the situation closely while developing new strategies to cope with potential further competitive activity by computer manufacturers.