Sales for office supplies merchant Staples Inc.’s North American Commercial business-to-business division inched up 1.1% for fiscal year 2015, while total sales declined 6.4%.

Staples does not break out web sales for North American Commercial, which sells through Quill.com and StaplesAdvantage.com as well as through sales reps. Quill caters to small and midsize companies, Staples Advantage to larger companies.

But in a conference call last week with stock analysts, CEO Ron Sargent pointed to the company’s online offerings as important to its overall growth, and pointed to the updated StaplesAdvantage.com as promoting offline sales through its contract specialists. “Over the past few years we’ve added nearly 300 specialists to drive growth in categories beyond office supplies and enhanced our contract website,” Sargent said. “We introduced this new digital selling tool to our sales team, and we continued to benefit from those investments during the fourth quarter.”

The company says its conversion rate of online visitors who eventually buy has improved on its desktop and mobile websites since Staples redesigned StaplesAdvantage.com in the second quarter of last year and made it easier to find and purchase products.

The company’s omnichannel sales programs produced nearly $500 million last year, Sargent said, including through its in-store Staples.com kiosks and click-and-collect features like buy online, pick up in store. Staples.com sells to small businesses as well as to individual consumers. “During the fourth quarter we began piloting our newest omnichannel capability, ship from store. Ship from store improves the customer experience, it allows us to manage our inventory more efficiently and positions us for same-day delivery,” Sargent said. “Early results are encouraging.”

In 2016, the office supplies distributor and retailer plans to continue growth by focusing sales and services on the North American mid-market, or businesses that range from 10 to 25 employees. Mid-market sales comprise about 20% of Staples’ contract sales, and is the company’s most profitable segment, said Shira Goodman, president of North American Commercial.

Staples plans to add more than 100 business account representatives, as well as expand its Staples-brand product assortment in categories beyond office supplies in 2016, Sargent said. “There are hundreds of thousands of mid-market customers that we don’t serve today, and they’re spending billions of dollars a year on the products and services we sell,” he said. “We’re increasing our focus on customer acquisition and retention and also growing our shared wallet. In 2016, we’ll increase the size of our mid-market acquisition sales force by more than 20%. We’ll strengthen our value proposition with our mid-market loyalty program which is driving increased spend and greater share, retention rates and increased customer engagement, and to leverage the strength of our category specialists to drive growth in categories beyond office supplies.”

In Q4, Staples’ growth rate in breakroom supplies and promotional products was in double digits, and facility supply sales were in high single-digit territory, Sargent said. Account managers drove low single-digit growth in Staples’ copy and print sectors to small- and medium-sized businesses, and categories like business cards, signs and banners generated strong traffic to Staples’ stores, Sargent said. “In total, contract sales and categories beyond office supplies grew in the low single-digits during the fourth quarter and now account for approximately half of our entire contract sales mix,” he said. In Q4, this momentum was offset by a low single-digit decline in sales of ink and toner, and a decline in furniture and technology sales, the company says.

For the 2015 fiscal year, Sargent said Staples generated “solid growth” in shredding and shipping services.

Sargent vowed to continue Staples’ quest to acquire Office Depot, despite the FTC rejecting a revised merger proposal in December.

As part of that proposal, Staples offered to transfer B2B commercial contracts worth up to $1.25 billion, up from $500 million previously, to Essendant Inc. Essendant, formerly known as United Stationers, is a distributor of office supplies and other products. The FTC dismissed that offer.

Nonetheless, Sargent told analysts Staples continues to make progress on the acquisition. On Feb. 2, Staples extended acquisition financing arrangements and the merger agreement to May 16 from Feb. 4, he said. “The extension will allow for the completion of federal court litigation with the FTC. The preliminary injunction hearing is scheduled to begin on March 21, and we expect a decision by May 10.” That hearing could be decisive, as the court granting an injunction stopping the merger temporarily would effectively kill the deal, Sargent said.  If the court grants the FTC’s request for a preliminary injunction, he told analysts, “the acquisition of Office Depot is over.”

Staples closed 12 stores in Q4 and 73 stores for the full year 2015 in North America. For the two-year period of 2014 and 2015, it closed 242 stores. In Q4, Staples eliminated more than 1,000 jobs across the company.

Staples Advantage is No.21 in the new B2B E-Commerce 300, which lists companies by their annual online B2B sales.

For the fourth quarter ended Jan.30, Staples reported:

• Online sales increased 1% at Staples.com.
• North American Commercial sales of $2.03 billion, down 1.4% from $2.06 billion the year prior.
• International sales of $791 million, down by 11.9% from $898 billion in U.S. dollars and a 1% decline when excluding currency fluctuations. The decline was primarily driven by sales declines in Europe, partially offset by double-digit growth in China, Staples reported.
• Total sales of $5.27 billion, a 6.9% decline from $5.66 billion in Q4 2014.
• Net income of $86 million, compared with a net loss of $260 million in 2014.

For fiscal 2015, Staples reported:

• E-commerce sales in North America on Staples.com grew 1%.
• North American Commercial sales of $8.36 billion, up 1.1% from $8.27 billion the year prior.
• International sales of $3.16 billion, down 16.2% from $3.77 billion in U.S. dollars and 2% on a local currency basis that factors out the strengthening dollar against other currencies.
• Total sales of $21.06 billion, down 6.4% from $22.49 billion in the prior year.
• Net income of $379 million, compared with net income of $135 million in fiscal 2014.

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