Staples looks for boost from overseas retail vets
FRAMINGHAM, MASS . —As Staples positions itself to generate a larger percentage of sales and profits from international operations and alternative channels, it has secured the services of several new board members to help.
Joining the Staples board last month was Justin King, ceo of food retailer J Sainsbury plc in the United Kingdom, and Robert Sulentic, group president of real estate developer CB Richard Ellis. The expertise of a European food retailing executive and a real estate executive who currently oversees European operations should prove useful as Staples’ U.S. superstore expansion opportunities wane and the company looks to accelerate growth from international operations and collaborative arrangements with non-competing retailers.
Staples currently operates 1,962 stores, but 1,672 of those units are located in the United States and Canada with the remaining 290 stores located primarily in Europe. Greater retail growth opportunity exists outside the United States via super-store expansion, as well as branded departments inside stores operated by other retailers. Staples has gained experience in that regard through deals that enable it to operate Staples-branded departments inside U.S. supermarkets.
Its newest board members should provide insight on both fronts. King has served as ceo of J Sainsbury since 2004 and prior to that he was with Marks & Spencer and Wal-Mart’s ASDA division. Sulentic spent the majority of his career with Trammel Crow, having joined the company in 1984. He was eventually named president and ceo of the firm, which was acquired by CB Richard Ellis in December 2006.
“Justin brings a wealth of retail industry knowledge and international experience and Bob brings exceptional business acumen and commercial real estate knowledge, making them great additions to our strong board of directors,” said Ron Sargent, Staples chairman and ceo.
In addition to King and Sulentic, Staples earlier this year appointed Vijay Vishwanath to its board. Vishwanath earned an MBA from Harvard and is head of the Boston-based global consulting firm Bain & Co.’s consumer practice. Prior to joining Bain & Co. in 1986, he was with Procter & Gamble.
How the international experience of Staples’ three new board members translates into growth remains to be seen, but clearly opportunities exist given the relatively small impact international operations have on Staples’ overall results.
Last year, the $2.4 billion international division represented 13% of Staples’ total sales of $18.1 billion. From a profitability standpoint, international generated a meager $51 million in operating profit, which represented roughly 3% of total company operating profits of $1.6 billion, excluding the affect of stock-based compensation.