Staples (SPLS) Looks to the Rio Olympics for a Boost

Staples (SPLS) hopes that its B-to-B operations will attract additional clients through its supply of apparel and more at the Olympics, Bloomberg Businessweek's Novy-Williams says.
By Michael Sheetz ,

NEW YORK (TheStreet) -- Staples (SPLS) is one of the two premier suppliers for all USOC Olympics Partners co-branded merchandising at the 2016 Olympics.

Bloomberg Businessweek's Eben Novy-Williams believes the Olympics represent a crucial opportunity for this business-to-business part of Staples.

"Anything you see in advertising, say in the next couple months, that has the Visa (V) logo on it and the Olympics rings, that was something that was made by Staples," Novy-Williams said on Bloomberg TV's "Bloomberg Markets." "This is 40% of Staples' business, this back-end business providing."

Staples will produce branded hard goods such as water bottles, bags, hats and even surfboards for companies' employees, such as their partner Visa. Staples' "main room for growth is the idea that they can add more clients overall on the business side as they continue to work with the USOC," Novy-Williams said. 

"The real business growth through the Olympics is that this is a high-profile event. You look at the USOC partners, they are big companies, big name partners, who any other business-to-business group would want to work with," Novy-Williams noted.

Much of the actual materials are not produced by Staples but contracted through third parties. However, Staples is not making the apparel for athletes during the Olympics, but rather for events leading up to the Rio games.

"When you get to the actual ground in Rio, you won't see it anymore. Nike (NKE) and Ralph Lauren (RL) pay a lot more than Staples pays for the rights to be the retail partners," Novy-Williams added.

Shares of Staples are down 0.22% to $8.90 in after-hours trading Monday. 

Separately, TheStreet Ratings team rates Staples as a "hold" with a ratings score of C+. 

The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: SPLS

Loading ...