Staples likely to terminate merger agreement with Office Depot; Staples remains committed to consistent and profitable growth

Business Wire, June 30, 1997

WESTBOROUGH, Mass.--(BUSINESS WIRE)--June 30, 1997--Staples, Inc.(NASDAQ:SPLS) today announced it will likely terminate its agreement to merge with Office Depot following a ruling by U.S. District Court Judge Thomas F. Hogan that granted the Federal Trade Commission (FTC) a preliminary injunction to block the proposed merger of the two companies. The boards of directors of both companies still need to review the judge's ruling and a vote is likely in the next few days.

Thomas G. Stemberg, chairman and chief executive officer, Staples, Inc., said, "We are disappointed with Judge Hogan's ruling, especially given the strength of our case and supporting evidence that demonstrate the enormous cost savings that would have resulted from our proposed merger. This is a sad day for small businesses and consumers who would have reaped the greatest benefit of all in the form of even lower prices.

"While we ardently disagree with the Judge's decision, we respect the judicial process and it is likely we will discontinue our merger plans with Office Depot. After spending millions of dollars and countless hours of associate time on the merger process, the additional expense and time involved in pursuing the matter further in the court system doesn't seem to be in the best interest of our shareholders, employees, or customers.

"In the last nine months, our merger integration task forces have had an opportunity to closely analyze all aspects of our business and obtain valuable insight. The end result is that we have developed new strategies, particularly in merchandising and distribution, which will continue to drive down Staples' operating costs and allow us to pass on these savings to our customers as we've done since Staples' inception. Already this year, Staples has been able to lower prices on products in all of our retail stores because of better buying and operating practices.

"As the fastest growing company in the office products industry, with industry leading comparable store and delivery sales increases for the last 11 quarters, Staples remains committed to consistent and profitable growth. We will open 120 stores in 1997 and 150 stores annually in 1998 and beyond. We'll continue our 11-year tradition of finding innovative and cost effective ways to serve the needs of our customers."

Staples, Inc. currently operates 662 office products superstores worldwide. This includes 606 stores in over 150 markets across the U.S. and in Canada under the names Staples, Staples Express, Business Depot and Bureau En Gros, as well as stores in the United Kingdom (Staples UK) and Germany (MAXI-Papier). The company operates a telephone order business, Staples Direct, and also has contract stationer operations under the names Staples Business Advantage and Staples National Advantage, which serve the needs of large regional and national corporations, respectively.

CONTACT: Staples

Investor Contact: Staples Media Contact:

Samuel J. Levenson Susan Grieb Simon

(508) 370-7963 (508) 370-7895/8635