Investments in digital paid off in the form of a 4.8% year-over-year increase in online sales for office supplies retailer Staples Inc. during fiscal 2014, a bright spot in an otherwise down year overall for the company.
Staples, No. 3 in the Internet Retailer 2014 Top 500 Guide, tells Internet Retailer it did $10.9 billion in online sales in 2014, up from $10.4 billion the previous year. In its Q4 2014 earnings filing, it reported online sales grew 8% for the quarter. Based on the figures provided, Internet Retailer estimates the retailer did $663.2 million in online sales for the quarter based on previously available data, up from $614.07 million during the same period last year. Staples says its European web sales declined but did not say how much.
CEO Ron Sargent told analysts on the retailer’s Q4 2014 earnings call Friday that Staples has invested heavily in e-commerce capabilities over the past two years, including enhancing the retailer’s desktop and mobile presences. He says he expects 2015 to be a year when the retailer starts seeing more delivery on those investments.
The company continues to shift its emphasis from bricks-and-mortar retail to digital. In fiscal 2014, Staples closed 169 stores and plans to shutter at least 56 more in fiscal 2015, according to its Q4 2014 filing with the Securities and Exchange Commission.
Sargent cites Staples’ increased online product assortment and improved pricing capabilities as changes the company has made to remain competitive.
“I’d like to continue to put pressure on our competition and to provide value to customers so that they think that Staples is always the place to think of for business supplies,” he says.
One way the retailer is putting pressure on the competition is by buying one of its largest rivals.
Staples announced last month that will acquire fellow office supplies retailer Office Depot, No. 9 in the 2014 Top 500 Guide, a move that marries two of the largest online retailers and creates a company that did an Internet Retailer-estimated $15 billion in web sales in 2013.
“We do think this is an opportunity to become even more competitive,” Sargent says.
For the fourth quarter ending Jan. 31, Staples reports:
- Total company sales of $5.656 billion, down 3.7% from $5.873 billion during the same period last year.
- Sales in North American stores and online of $2.699 billion, down 6.9% from $2.900 billion during the same period last year.
- Sales from international operations of $898.44 million, down 11.0% from $1.010 billion during the same period last year.
For the 2014 fiscal year ended Jan. 31, Staples reports:
- Total company sales of $22.492 billion, down 2.7% from $23.114 billion in fiscal 2013.
- Sales at North American stores and online of $10.449 billion, down 5.9% from $11.103 billion in fiscal 2013.
- Sales from international operations of $3.773 billion, down 4.9% from $3.969 billion in fiscal 2013.