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Staples Report



Staples Report

Shares Held: 109
Date Purchased:  09/09/99
HPD paid:   $27.60 per share; $3,008.81
Currently Trading: $15.63 (9/15/2K)
Percentage Gain: -43.4%
Annualized Return: -43.4%

Broker Recommendations:
   Strong Buy      9
   Buy                 6
   Hold               3
   Sell                 0
   Strong Sell      0

  Consensus  1.61




I think Staples is suffering growing pains right now.  Given time this
will heal.
Since the company is spending money on expansion, it has a great deal of
debt.  However,
it is 1) establishing new territory (stores)  2) acquiring other
companies to expand its
territory  3) Testing new markets - airports and  4) Establishing a
presence on the internet.
The internet is how people are starting to purchase known commodities
(things you do not
have to try on or question the quality of).  No doubt it is having
trouble holding on to
good workers.  The smart workers are moving up or on to higher paying
positions elsewhere.
In the long run, I think the value of the stock will go up and I think
we should hold onto it.



September 13, 2000   S&P upped Staples rating to positive (from Stable);
though it still
has a triple-B-minus  corporate credit rating.

"S&P said that the outlook revision is based on the agency's belief that
profitability
measures will continue to improve and that capital spending and share
repurchases will
be managed prudently, with an emphasis on strengthening the balance
sheet through debt
reduction."

Staples' core business is it's 1,100 stores.  It's catalog business is
strong, especially
since the acquisition of Quill corporation.

"S&P said Staples is the industry leader in terms of profitability.
Return on permanent
capital was nearly 18% in 1999, and operating margins have exceeded 10%
for more than
 five years. Staples faces less direct competition in most of its
markets than Office
Depot Inc. or OfficeMax Inc., the two other office products superstore
chains. Staples'
strategy has been to target markets with favorable demographics where it
can achieve
economies of scale through dense store concentration."

Competition with its competitors will increase as Staples opens new
stores.


September 12, 2000  Staples opens its fourth airport store.  Airport
stores provide
supplies in small quantities, access to telephone operators, and kiosk
access to
internet sales.  Deliveries can be made to the home office or to the
customer's destination.
Self-service copying, faxing, and shipping are also available at these
locations.

"Staples recently received an award as the "Best New Specialty Airport
Retail Concept" by
World Airport Retail News and the "Most Innovative Concession" Award for
the Philadelphia
International Airport store from Airport Councils International."