This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

No. 2 Online Retailer Staples Takes on Chegg and Amazon

NEW YORK (TheStreet) -- At first glance, Staples (SPLS) brings to mind its office supplies or its marketing campaigns: "Yeah, we've got that" and the "That was easy" button. However, Staples.com is actually the No. 2 online retailer in the U.S. The company continues to fight against leader Amazon (AMZN). The latest move by Staples is to take on several competitors, including the recently public Chegg (CHGG).

Staples announced that it will begin offering textbook rentals through a partnership with BookRenter.com. That will allow Staples to provide over 5.5 million different titles online to college students. BookRenter.com was the first online textbook rental company back in 2006.

Book renter rival Chegg went public in November and has since seen its stock fall by 25%. Shares now trade just over $7, as investors question whether the company can continue to grow despite this new competition. With Staples added to the mix, Chegg shares could actually fall further, as they will need to more heavily rely on diversification to other areas, like study tools.

I'm wondering if Staples will utilize its retail presence to streamline the process. Perhaps Staples could offer free shipping if the books are picked up in-store, or offer some sort of gift card to the store with an online book rental purchase. While Staples' online presence flourishes, its retail operations continue to struggle.

Staples has posted eight consecutive quarters of negative same-store sales. In the most recent quarter, Staples saw same-store sales fall 3%, and also closed 107 underperforming stores. To try to get customers into Staples locations, the company has created partnerships with the U.S. Postal Service, which has branches in 82 Staples locations. In November, Staples announced that it will sell Square Stand at more than 1,000 of its stores. Square sells credit card-reader hardware that enables businesses to accept credit card charges via tablet. Staples includes a gift card offer with a purchase from Square.

Staples continues to find itself in a war with many competitors. The company's two biggest retail rivals, Office Depot and OfficeMax, merged to form the new Office Depot (ODP). Staples has a market capitalization six times larger than this retail rival, though, thanks in large part to a huge online business and international operations.

Retail operations at Staples could continue to struggle, much like many large retailers around the country. Staples is not completely safe from this trend, but does have the added safety margin because of its online dominance. Staples continues to push the envelope with Amazon, even offering a price match through the holidays on most items found online. In the third quarter, Staples told investors it completed a big refresh to its website, which added 70,000 additional products. Staples also acquired Runa, an e-commerce personalization technology company, that could boost online incremental sales.

Staples shares trade close to their 52-week lows, which seems a little unfair. The company should continue to shine with less retail competition and an increasing online presence.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,247.92 +91.07 0.53%
S&P 500 2,009.74 +8.17 0.41%
NASDAQ 4,587.3040 +25.1150 0.55%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs