Office Supply Stores Report Weak Quarters

The same retail woes cutting into home-improvement and department stores sales are spilling over to office products: Staples, the Framingham, Mass.-based retailer, reports that net income fell 5% in the third quarter. While total company sales increased 9%, to $5.2 billion, comparable-store sales dropped 3% versus 2006. And Staples expects "flat to slightly negative same store sales" for the fourth quarter.

Meanwhile, rival Office Depot, based in Delray Beach, Fla.--which last week reported that same-store sales fell 5% in the third quarter --has reportedly warned investors that the uncertain retailing environment might cause it to post further earnings declines in the fourth quarter.

But that's not stopping the chains from doing everything they can to woo holiday shoppers. "The holiday season isn't necessarily our bread and butter," says a Staples spokesperson, "and for our small-business customers, January, getting-back-to business sales are strong. But so far, holiday shopping has been about technology--for us, GPS systems, digital cameras, digital picture frames, and laptop computers have all been doing well."



Last week, Staples launched a new holiday campaign promoting such techno-gifts. The ads, featuring a feisty family baby in control of the "Easy" button, are running on TV, radio, online and via direct-mail advertising, and focusing on such hot technology brands as TomTom, Canon, HP and Dell.

OfficeMax, meanwhile, is faring a little better: For its most recent quarter, the Naperville, Ill.-based chain managed a slight gain, with same-store sales creeping up 0.8% in the quarter.

Its holiday efforts focus on the return of comical online sites launched last year, including, where you can upload your own photos onto dancing elves. (Last year, the company claims the site generated more than 11 million elves.) Other returning sites include,, and

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