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Conversions and sales per visit grow for Staples

August 20, 2015 05:19 PM
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Staples Inc. unveiled an upgraded version of its website during the second quarter of fiscal 2015 and continued to cut costs.

CEO Ron Sargent told analysts on the office supplies retailer’s Q2 2015 earnings call the changes are aimed at simplifying and improving the overall customer experience. Upgrades include adding responsive design, which adjusts the visitor’s view to fit any device, and improved search capabilities and personalization features, he said, according to a transcript of the call from Seeking Alpha. All have contributed to the improved metrics, Sargent said, while declining to disclose specific numbers about those increases.

Staples, No. 3 in the Internet Retailer 2015 Top 500 Guide, is continuing its quest to cut costs and balance store and online sales by closing more stores in addition to upgrading its e-commerce site, Staples.com. The company reported that online sales inched forward by 1%, matching its Q1 e-commerce growth rate, while conversion rate and sales per shopper visit both increased in the quarter, Sargent told analysts.

During the second quarter Staples closed 15 stores in North America and remains on track to close about 60 stores this year, the company says. It also downsized four stores to a 12,000 square-foot-format in the quarter, bringing the total number of such stores to 62. Staples is on track to reach its goal of $250 million in annual cost savings in 2015, Sargent said.

For the second quarter ended Aug. 1, Staples reported:

  • Online sales increased by 1%. The company did not break out web sales in dollars.
  • Total sales of $4.94 billion, down by 5.4% from $5.22 billion.
  • North American stores and online sales were down 7.5% to $2.11 billion from $2.28 billion.
  • International sales fell 17.1% to $780 million from $941 million.
  • Comparable-store sales declined 3%.
  • Net income of $36 million, compared with $82 million in the second quarter last year.

Staples did not disclose online sales data for the first six months of fiscal 2015, but did report:

  • Total sales of $10.20 billion, down by 6.2% from $10.87 billion in the first half of 2014.
  • Net income of $95 million, compared with net income of $178 million.

During Q2 Staples also completed an upgrade of StaplesAdvantage.com, the e-commerce site for Staples Advantage, the company’s business-to-business division.

“The new site is faster, it’s optimized for business customers and designed to sell categories beyond office supplies,” Sargent told analysts. “Traffic to the new site is up, customer conversion continues to improve year-over-year, and over the coming weeks we’ll expand our omnichannel capabilities with the launch of buy online, pick up in store,” he said. Within a few weeks B2B customers will be able to order products on StaplesAdvantage.com and pick them up from a store in two hours.

Sargent also updated Staples’ $6.3 billion stock deal to acquire Office Depot on the earnings call. The deal, announced in February, is on track for completion later in 2015, Sargent told analysts. The deal would create a $39 billion company generating about 40% of its revenue online and complete the consolidation of what were once the three national office supply chain retailers. In November 2013, Office Depot acquired OfficeMax in a deal valued at $1.17 billion.

In the second quarter Office Depot shareholders approved the acquisition, Sargent said, and the regulatory review process rolls on. “During Q2 we received anti-trust approval from China and New Zealand and just last week we received clearance in Australia,” he said. “In the United States, we continue to work cooperatively with the Federal Trade Commission, and we remain on track with our response to the second request for information. Outside the United States, we are also on track with the regulatory review process and related filings in the European Union and Canada.”

 

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