Photographer: Jin Lee/Bloomberg

Staples' Licensing Push Moves the Company Beyond Office Supplies

  • First product is online service for managing records
  • Staples name could eventually be put on flooring and insurance

Staples Inc., struggling to sell office supplies in an increasingly digital world, is embarking on a new strategy to license its name and get more revenue from business services.

In the first part of the effort, the company will work with GRM Information Management Services Inc. to offer a Staples-brand service that manages records, according to interviews with executives. The products will include secure online storage and document scanning, with GRM offering the services through a site called Staplescloud.com. The biggest customers are expected to be record-intensive businesses, such as health-care providers, real estate companies and law firms.

By teaming up with partners, the largest office-supply retailer aims to push outside its brick-and-mortar roots without the risk or expense. The move also could provide the chain with a much-needed sales boost after its last major growth strategy -- the acquisition of chief rival Office Depot Inc. -- was blocked earlier this year. Staples is betting that the licensing plan can help expand the brand’s reputation beyond legal pads and paper shredders.

“Our customers view us as their primary source of office supplies,” said Frank Bifulco, executive vice president of global marketing for Staples. “We want to be viewed more and more as their preferred provider of all the essential products and services they need.”

Foiled Deal

The debut of this strategy comes about five months after regulators blocked the merger with Office Depot on antitrust grounds. The fallout from that foiled deal has been dramatic, with long-time Chief Executive Officer Ron Sargent resigning and the stock tumbling more than 25 percent.

Staples named interim CEO Shira Goodman as the permanent replacement for Sargent last month. The Framingham, Massachusetts-based retailer also has been closing poor-performing stores.

But even if Office Depot deal had been completed, concerns about the decline of office-supply retailing would have remained. The licensing program is an attempt to address that.

Future deals -- handled by licensing agency Brandgenuity -- may include putting the Staples name on business insurance and flooring, according to Paul Bessinger, director of merchandising and innovation at Staples. Licensing will get the company into new markets faster by eliminating many of the barriers to entry, he said.

Quicker Approach

“There’s this whole element of the learning curve that we would have to go through,” Bessinger said. “Imagine if Staples were to ramp up these businesses? Building them is one thing and figuring out how to sell them is another. This is more instantaneous.”

Staples sees its well-known brand as having the power to disrupt markets such as online document storage because they are fragmented. Licensing could also push the Staples name into new channels of distribution -- rather than just its own stores. If it were to start selling Staples-branded floor coverings, for instance, they would likely be sold at other retailers.

“The Staples name gives us much better reach to far more customers,” said Avner Schneur, CEO of GRM. “This will amplify our offering dramatically compared to our own capabilities. That’s why it’s a good match.”

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