21 replies to this topic

[Cousty]

What do you guys make of this?

Staples Acquires American Identity

(5/23/2007)

As first reported in a Breaking News Alert yesterday, Staples Inc. announced that it has acquired Counselor Top 40 distributor American Identity (asi/120601) from Republic Financial Corp. Financial terms of the deal were not released. Staples, the publicly held (NASDAQ: SPLS) office products company, believes this deal will give the company a solid entry into the growing ad specialty market. "We're interested in expanding our capabilities so we can consistently offer new products to our customers. We think this deal helps us do that," said Jay Baitler, executive vice president of Staples Contract Division, in an exclusive interview with Counselor. "We had done some experiments regarding promotional products in some of our retail outlets, and decided this was a great market to investigate further."
American Identity, which last year ranked as the fifth largest distributor in Counselor's Top 40 with $180 million in 2005 North American promotional products sales, views the Staples acquisition as a way for the company to expand even further. "We were looking for a growth partner and now we have a situation where we can take advantage of Staples' resources like technology and distribution," said Roger Henry, CEO of American Identity.
Baitler cites e-commerce as one area that he expects the two companies to work well together. "Staples is the second-largest e-tailer in the world behind Amazon.com, and now we can bring some of that expertise to American Identity and the markets they serve," he said. "Investing in that part will be great for the growth of American Identity." American Identity will continue to operate as a separate business and will provide products through Staples' North American Delivery and North American retail businesses. Henry says the company will keep its name and will still be based in Overland Park, KS. In 2006, Staples Inc. had sales of $18.2 billion and operated more than 1,900 retail stores in 22 countries.

[cmroma]

I'll raise you an iota and half a smidge!:D

[DSubasa]

It will be interesting to see how Staples pushes this, especially implementing with their retail operation.

The official news release: http://phx.corporate...5147&highlight=

[royster13]

Staples will reach a lot of consumers that have never used "promotional products" before....The market for "promotional products" is huge and if you work hard at mastering your craft you can get all the business you need....Despite all the "so called" competition out there I am having my best year ever....RCS...

[Cousty]

Yeah, I think Staples will be for the point and shoot clients. Those who just want their logo on something. I'm eager to see if they'll have outside salesmen who really understand and desire to meet their clients goals. That is assuming the clients they get actually have goals.

[DSubasa]

As noted in the press release, they plan on keeping the 2 divisions separated. If understand it right, American Identity will still have sales reps chasing down orders. AmID will probably handle and phone & internet orders (DBA as Staples Promotional or something). I doubt the Staples stores will have full Outside Reps in each store, but maybe they will. The store-in-a-store concept has been working for some of the retailers - Best Buy is making a killing with their Geek Squad division.

Im more interested to see how they handle walk-in customers, mostly small businesses. Will they have consultants right there at the counter? Will they build a catalog of "preferred products"?

[Liberty]

Yes and Yes, they already do. Our local staples has a small promo display, has for years. I asked a few questions of the counter person once and the anser was totally un-helpful. Go to marktheworld.com and have a look around. It's all Staples.

They have a long way to go to catch up to the 4imprint level e-tailers but I would say they have the financial clout to get it done and now they have a backend they can lean on.

DSubasa said:

Im more interested to see how they handle walk-in customers, mostly small businesses. Will they have consultants right there at the counter? Will they build a catalog of "preferred products"?

[eronan]

My thought is that Staples just wasn't successful doing PP's on their own so they just bought a company to do it for them. They recognize the PP industry potential and want a piece of it. I compete with AI all the time but I doubt this will change anything on that front, however, our office will buy office supplies from someone else now I'm sure. Might as well not add dollars to the competitor's bottom line.

[lmargolis]

Well, in the last year I've lost three of my small customers to Staples here in Portland, Oregon. They said Staples was cheaper and that they could buy when they were in the store for other things. Don't need price shoppers.
If someone doesn't value service or creativity they can't be helped.

[Andrea Davis]

DSubasa said:

As noted in the press release, they plan on keeping the 2 divisions separated. If understand it right, American Identity will still have sales reps chasing down orders. AmID will probably handle and phone & internet orders (DBA as Staples Promotional or something). I doubt the Staples stores will have full Outside Reps in each store, but maybe they will. The store-in-a-store concept has been working for some of the retailers - Best Buy is making a killing with their Geek Squad division.

Im more interested to see how they handle walk-in customers, mostly small businesses. Will they have consultants right there at the counter? Will they build a catalog of "preferred products"?

I find this hard to believe - I would not worry about it! Have you tried to find anybody to help you in a Staples store? Try to ask for customer service or call Staples lately?
Who's worried?
Andrea Davis
Ballyhoo Concepts Inc.
Calgary, AB

[Cousty]

lmargolis said:

Well, in the last year I've lost three of my small customers to Staples here in Portland, Oregon. They said Staples was cheaper and that they could buy when they were in the store for other things. Don't need price shoppers.
If someone doesn't value service or creativity they can't be helped.

That's the same way that I feel. If my client is looking for the amount of service they would get from Staples, they're not going to want to pay for what I have to offer. I work hard for my clients, Staples won't.

[ideaguy]

Many times, I have found the same thing. The people at these stores don't necessarily care about customer service. Most do not have the proper training. Ultimately, they may take some of the business away from us - the people who want everything cheap, and will penny pinch us to death on price. They've already got those people for their custom business cards....IDEAGUY

Andrea Davis said:

I find this hard to believe - I would not worry about it! Have you tried to find anybody to help you in a Staples store? Try to ask for customer service or call Staples lately?
Who's worried?
Andrea Davis
Ballyhoo Concepts Inc.
Calgary, AB

[Cousty]

We're almost making it sound like it's a blessing taking away those pennypinchers who are looking for 100 pens w/ their copy paper. Would you guys go as far as to say that?

[Blazingwolf]

Well, I have to agree that it should not effect the average promo product sales person. However, the buying power of a corporation that size has to be amazing, and it might lead to competition as far as lowest bidder. I'm sure they could go lower than I and lose a few grand just to get their name out, whereas, I'm not that wealthy and would probably not be able to offer a bid that low. Of course they won't always offer a low bid, but I'm thinking in the beginning they will underbid all kinds of people just to pull that clientele into their store or website.

[DSubasa]

I just looked in the FastFind - AI reported $180 Million in sales last year. Im sure they have significant buying power everywhere already.

[Schlep]

Just think for every order they goof up or create an unhappy customer, that will be a new client for one of us.

And knowing Staples I am sure there will be a lot of them.

[stokguy]

tHEY HAVE ISSUES WITH MAKING COPIES AND GETTING OTHER THINGS RIGHT,LET ALONE TRYING TO SELL PREMIUMS, IN TIME THOUGH THEY WILL TAKE SOME BUSINESS FROM EVERYONE.

[AdmanGR]

Just curious, anyone know how Corporate Express is doing these days??

The concept of office supplies and promotional advertising specialties ( maybe toss in jan/san, and coffee service too) will make sense to some corporate, national entities. The ability to pay one invoice a month for a multitude of commodities(perceived as) is appealing to many larger organizations(already is). One stop shopping and the ability to get all of the items off a website(company store) sounds like a great business plan to me....guess I'm the only one that sees this merger as a great long-term strategic move on Staples part.

This merger won't affect my down the street business, but as this industry matures(as it will)...the pricing on "product" will feel the pressure from major players like this. The office supply industry has been using "matrix pricing" for years. The paradigm shift in the office supply industry decimated the mom/pop office supplies of yesteryear....I know, I sold successfully in the industry from '85-'95 and watched in horror as the big boys came to town. Loss leaders, leaders, and rebates on the backend - clout. Not to mention, marketing savvy...

So, since we ALL sell programs and never take an order - we have nothing to fear, right?;)

Just what I see in my crystal ball...