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Staples SSG on HPD site



Hello

A new SSG for Staples is on the HPD site.

Though the growth potential is not as strong as when we first looked
at this stock, I think it is still a good stock to own.

This is the first big hiccup Staples has had.  From what I've read this
is
due to the company's aggressive expansion (it has recently opened hubs
in Canada and Belgium) and unimpressive e-commerce business.

When Staples plans to populate a new area, it builds a hub.  Merchandise
is
shipped from the manufacturer to Staples hub and Staples ships it to
stores from
there.  This allows the company to distribute products more evenly to
its stores.
(I think Sam Walton of Walmart came up with this method of inventory
control.)

This compounds the cost of expansion because 1) the facility has to be
built, rented, or
purchased.  If the facility is rented or purchased it has to be
modified.  2) Then it must
be stocked for distribution.  3) And stores in the area  must be built,
rented, or purchased
as well as stocked (with employees and product).

Staples is taking risks with stores in new locations such as airports.
Not a low rent district.

E-commerce has been a bust.  It seemed like the way to go.  However,
sales have not
generated as much revenue as expected.  Not providing customers a means
to purchase
products via the internet would have been a bigger mistake.


I forgot to get Office Depot and Office Max's value lines while at the
library.
Here in niceville, the library closes at 2pm Saturday and does not open
again until Tuesday.

Talk with you tomorrow.

JP.