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Staples Retail and Delivery Reports Industry Leading Third Quarter Results
     FRAMINGHAM, Mass.--(BUSINESS WIRE)--Nov. 16, 1999--

     Same-Store-Sales Grow 9 Percent; Net Income Jumps 38 Percent;

Earnings Per Share Up 33 Percent; Revenue Increases 25 Percent

Staples Inc. (NASDAQ:SPLS), the pioneer of the office superstore industry, today announced that its Retail and Delivery business earned net income of $95.4 million, or $.20 per common share, on a diluted basis, for the third quarter which ended October 30, 1999, compared with $69.3 million or $.15 per common share, on a diluted basis, for the prior year.

Historical data has been restated to reflect the merger with Quill Corporation under the pooling of interests method of accounting, and a three-for-two stock split in January 1999. Staples Retail and Delivery results exclude the retained interest in Staples.com. Including Staples.com's $2.8 million loss for the quarter, earnings were still $.20 per common share on a diluted basis.

"This quarter's results demonstrate our ability to consistently deliver superior performance in a competitive, aggressive market," said Staples Chairman and Chief Executive Officer Thomas G. Stemberg. "We're seeing strong results in almost all our businesses: North American retail sales per store continue to grow even as we add new stores; our European retail operation has made a turnaround; and our contract and delivery business is strong. Our focus on execution and the customer, along with the new Staples.com tracking stock, will help ensure that we continue to achieve the revenue and profit growth our investors have come to expect."

Sales for the quarter rose 25 percent to $2.37 billion from $1.9 billion reported for the same period last year. Comparable sales for the 853 stores open for more than one year and delivery hubs increased 9 percent for the third quarter company wide and 10 percent in North America.

In addition, this quarter Staples Retail and Delivery:

--Created a tracking stock, Staples.com Stock, to reflect the performance of its e-commerce businesses, including Staples.com, Quillcorp.com and StaplesLink.com;

--Opened 56 new retail stores and acquired 42 European stores, ending the quarter with 1,107 stores worldwide; 826 stores in the United States, 146 stores in Canada, 63 stores in the United Kingdom, 45 stores in Germany, 21 stores in the Netherlands and 6 stores in Portugal;

--Continued to aggressively expand in Europe by completing its acquisition of 42 office supply superstores throughout Germany, the Netherlands and Portugal;

--Added Pack and Ship Centers in all its U.S. superstores, the first national office supply retailer to do so;

--Incorporated online order capabilities in its U.S. superstores, making approximately 30,000 additional SKUs available for customers; and

--Named Robert J. Moore executive vice president for marketing, succeeding Jeanne B. Lewis, who recently was named president of Staples.com.

About Staples

Staples Inc. is a $7 billion retailer of office supplies, furniture and technology to consumers and businesses from home-based businesses to Fortune 500 companies in the United States, Canada, the United Kingdom, Germany, the Netherlands and Portugal. Headquartered outside Boston, Staples invented the office superstore concept and today is the largest operator of office superstores in the world. The company has over 46,000 employees serving customers through more than 1,100 office superstores, mail order catalogs, e-commerce and a contract business. More information about the company is available at http://www.staples.com.

Certain information presented within this news release may constitute forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, which are discussed in our most recent Proxy Statement on file with the Securities and Exchange Commission.

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                     STAPLES RETAIL AND DELIVERY
                     Combined Statements of Income
                     (Dollar Amounts in Thousands)

                         (Unaudited)               (Unaudited)
                       13 Weeks Ended             39 Weeks Ended
                  October 30,    October 31,  October 30,  October 31,
                     1999           1998        1999           1998


Sales           $  2,369,832  $  1,895,724  $ 6,254,706   $ 5,036,982
Cost of goods
 sold and
 occupancy costs   1,781,090     1,428,627    4,722,957     3,842,532

    Gross profit     588,742       467,097    1,531,749     1,194,450

Operating and
 other expenses:
  Operating
   and selling       333,879       264,129      912,850       718,899
  Pre-opening          4,570         4,011       13,977        11,595
  General and
   administrative     85,777        79,173      254,784       216,456
  Amortization of
   goodwill            3,060           901        8,318         2,752
  Merger-related and
   integration costs    --            --           --          41,000
  Interest and
   other expense, net  5,098         4,363       10,439        14,951

    Total operating
     and other
      expenses       432,384       352,577    1,200,368     1,005,653


    Income before
     equity in loss
     of affiliates,
     retained interest
     and income
      taxes          156,358       114,520      331,381       188,797
  Loss related to the
   retained interest
   in Staples.com     (2,844)          (99)      (6,550)         (203)


   Income before
    income taxes     153,514       114,421      324,831       188,594
Income tax expense    60,980        45,235      129,239        74,619

    Net income before
     minority
      interest        92,534        69,186      195,592       113,975
  Minority interest     --            --           --             135
    Net income  $     92,534  $     69,186  $   195,592   $   114,110


Basic earnings per
 common share
    Historical net
     income per
     common
      share      $      0.20   $      0.16  $      0.42   $      0.27


Diluted earnings per
 common share
    Historical net
     income per
     common
      share      $      0.20   $      0.15  $      0.41   $      0.26


Pro forma:
   Historical net income                                  $   114,110
   Provision for income
    taxes on previously untaxed
     earnings of pooled
     S-Corporation income                                       1,814

    Pro forma net income                                  $   112,296


Basic earnings
 per common share
    Pro forma net income
     per common share                                     $      0.27


Diluted earnings
 per common share
    Pro forma net
     income per common share                              $      0.26


Number of shares
 used in computing
 historical
 and pro forma
 basic net
 income per
 common share    460,547,504   426,183,678  461,933,928   423,056,732

Number of shares
 used in computing
 historical and
  pro forma diluted
  net income per
  common share   472,344,107   469,768,126  475,059,118   466,194,189



    See notes to combined interim financial statements.


                      STAPLES RETAIL AND DELIVERY
                        Combined Balance Sheets
                     (Dollar Amounts in Thousands)


                                             October 30,
                                                1999      January 30,
                                             (Unaudited)     1999

ASSETS
Current Assets:
  Cash and cash equivalents                  $   90,164   $  357,993
  Short-term investments                          1,211       17,428
  Merchandise inventories                     1,534,439    1,340,432
  Receivables, net                              433,123      221,836
  Inter-business receivable from Staplescom       4,281         --
  Deferred income taxes                          47,374       75,261
  Prepaid expenses and other current assets      67,192       50,117
   Total current assets                       2,177,784    2,063,067

Property and Equipment:
  Land and buildings                            309,326      231,378
  Leasehold improvements                        427,329      372,451
  Equipment                                     491,096      399,153
  Furniture and fixtures                        288,219      239,755
   Total property and equipment               1,515,970    1,242,737
  Less accumulated depreciation and
   amortization                                 491,591      403,462
   Net property and equipment                 1,024,379      839,275

Other Assets:
  Retained interest in Staples.com               26,497        1,962
  Lease acquisition costs, net of
   amortization                                  70,613       75,127
  Goodwill, net of amortization                 378,093      148,201
  Deferred income taxes                          31,335       28,735
  Other                                          25,265       22,814
   Total other assets                           531,803      276,839
                                             $3,733,966   $3,179,181

LIABILITIES AND GROUP EQUITY
Current Liabilities:
  Accounts payable                           $  935,855   $  794,427
  Accrued expenses and other current
    liabilities                                 537,114      438,226
  Debt maturing within one year                  21,832       32,594
   Total current liabilities                  1,494,801    1,265,247

Long-Term Debt                                  492,910      205,015
Other Long-Term Obligations                      58,515       52,033
Group Equity                                  1,687,740    1,656,886
                                             $3,733,966   $3,179,181

    See notes to combined interim financial statements



                      STAPLES RETAIL AND DELIVERY
                   Combined Statements of Cash Flows
                     (Dollar Amounts in Thousands)

                                                    (Unaudited)
                                                   39 Weeks Ended
                                               October 30, October 31,
                                                    1999       1998
Operating Activities:
Net income                                       $ 195,592  $ 114,110
Adjustments to reconcile net income to net cash
used in operating activities:
Minority interest                                     --         (135)
Retained interest in loss of Staples.com             6,550        203
Depreciation and amortization                      125,633     89,682
Merger-related and integration costs                  --       41,000
Expense from 401K and PARS stock contribution       13,633      6,351
Deferred income tax benefit                         24,630    (23,388)
Change in assets and liabilities, net of
 companies acquired using
 purchase accounting:
Increase in merchandise inventories               (150,260)  (177,353)
Increase in receivables                           (184,997)   (74,394)
(Increase)/Decrease in prepaid expenses
 and other assets                                  (31,307)     5,351
Increase in accounts payable, accrued
   expenses and other current liabilities          158,581    150,227
Increase in other long-term obligations              5,146      7,267
                                                   (32,391)    24,811
Net cash used in operating activities              163,201    138,921

Investing Activities:
Acquisition of property and equipment             (244,949)  (253,428)
Acquisition of businesses, net of
 cash acquired                                    (241,940)      --
Proceeds from sales and maturities of
 short-term investments                             32,836     11,356
Purchase of short-term investments                 (16,651)    (6,899)
Proceeds from sales and maturities of
 long-term investments                                --       18,995
Purchase of long-term investments                     --       (2,545)
Capital contributions to Staples.com               (29,921)      (712)
Inter-business revolver advances to Staples.com     (3,536)    (1,052)
Acquisition of lease rights                           (130)   (37,705)
Other                                                2,170      2,994
Net cash used in investing activities             (502,121)  (268,996)

Financing Activities:
Proceeds from sale of capital stock                 30,191     41,997
Proceeds from borrowings                           745,501     26,171
Payments on borrowings                            (470,164)   (53,598)
Purchase of dissenting shareholder
 S-Corporation stock                                  --      (48,101)
Purchase of treasury stock                        (234,446)    (8,057)
Dividends to shareholders of acquired S-Corp          --      (15,904)
Net cash provided by/(used in)
 financing activities                               71,082    (57,492)

Effect of exchange rate changes on cash                  9        124

Net decrease in cash and cash equivalents         (267,829)  (187,443)
Cash and cash equivalents at beginning of period   357,993    381,088
Cash and cash equivalents at end of period       $  90,164  $ 193,645

     See notes to combined interim financial statements


                    STAPLES, INC. AND SUBSIDIARIES
                   Consolidated Statements of Income
           (Dollar Amounts in Thousands, Except Share Data)

                             (Unaudited)             (Unaudited)
                           13 Weeks Ended          39 Weeks Ended
                       October 30  October 31, October 30, October 31,
                           1999        1998        1999        1998

Sales                 $ 2,393,811 $ 1,899,770 $ 6,305,987 $ 5,046,086
Cost of goods sold
 and occupancy costs    1,799,564   1,431,596   4,762,428   3,849,207
 Gross profit             594,247     468,174   1,543,559   1,196,879

Operating and
 other expenses:
 Operating and selling    340,263     264,575     926,320     719,957
 Pre-opening                4,570       4,011      13,977      11,595
 General and
  administrative           89,497      79,958     263,747     218,138
 Amortization
  of goodwill               3,060         901       8,318       2,752
 Merger-related and
  integration costs          --          --          --        41,000
 Interest and other
  expense, net              5,162       4,372      10,554      14,960
  Total operating
   and other expenses     442,552     353,817   1,222,916   1,008,402


 Income before
  income taxes            151,695     114,357     320,643     188,477
Income tax expense         59,161      45,171     125,051      74,502
 Net income before
  minority interest        92,534      69,186     195,592     113,975
Minority interest            --          --          --           135
 Net income              $ 92,534    $ 69,186   $ 195,592   $ 114,110

Basic earnings
 per common share
 Historical net income
  per common share         $ 0.20      $ 0.16      $ 0.42      $ 0.27

Diluted earnings
 per common share
 Historical net income
  per common share         $ 0.20      $ 0.15      $ 0.41      $ 0.26

Pro forma:
 Historical net income                                      $ 114,110
 Provision for
  income taxes on
  previously untaxed
  earnings of pooled
  S-Corporation income                                          1,814
 Pro forma net income                                       $ 112,296

Basic earnings
 per common share
 Pro forma net income
  per common share                                             $ 0.27

Diluted earnings
 per common share
 Pro forma net income
  per common share                                             $ 0.26

Number of shares
 used in computing
 historical and
 pro forma basic
 net income per
 common share         460,547,504 426,183,678 461,933,928 423,056,732

Number of shares
 used in computing
 historical and
 pro forma diluted
 net income per
 common share         472,344,107 469,768,126 475,059,118  466,194,189

 See notes to consolidated financial statements.


                    STAPLES, INC. AND SUBSIDIARIES
                      Consolidated Balance Sheets
           (Dollar Amounts in Thousands, Except Share Data)


                                            October 30,
                                               1999        January 30,
                                            (Unaudited)       1999
ASSETS
Current Assets:
 Cash and cash equivalents                 $    90,164    $   357,993
 Short-term investments                          1,211         17,428
 Merchandise inventories                     1,534,439      1,340,432
 Receivables, net                              433,123        221,836
 Deferred income taxes                          47,374         75,261
 Prepaid expenses
  and other current assets                      67,192         51,150
  Total current assets                       2,173,503      2,064,100

Property and Equipment:
 Land and buildings                            309,326        231,378
 Leasehold improvements                        427,329        372,451
 Equipment                                     498,333        400,225
 Furniture and fixtures                        288,219        239,755
  Total property and equipment               1,523,207      1,243,809
 Less accumulated depreciation
  and amortization                             492,036        403,520
  Net property and equipment                 1,031,171        840,289

Other Assets:
 Lease acquisition costs,
  net of amortization                           70,613         75,127
 Investments                                    25,665           --
 Goodwill, net of amortization                 378,093        148,201
 Deferred income taxes                          31,335         28,735
 Other                                          25,265         22,814
  Total other assets                           530,971        274,877
                                           $ 3,735,645    $ 3,179,266

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
 Accounts payable                          $   935,855    $   794,427
 Accrued expenses and
  other current liabilities                    538,793        438,311
 Debt maturing within one year                  21,832         32,594
  Total current liabilities                  1,496,480      1,265,332

Long-Term Debt                                 492,910        205,015
Other Long-Term Obligations                     58,515         52,033
Stockholders' Equity:
 Preferred stock, $ 01
 par value-authorized
 5,000,000 shares;
 no shares issued                                 --             --
 Common stock, $ 0006
 par value-authorized
 1,500,000,000 shares;
 issued 467,201,085 at
 October 30, 1999 and
 461,538,061 shares
 at January 30, 1999                               280            277
 Additional paid-in capital                  1,109,883      1,043,194
 Cumulative foreign currency
  translation adjustments                       (9,791)       (11,675)
 Unrealized gain on investments                  1,138              7
 Retained earnings                             828,914        633,321
 Less: treasury stock at cost,
 10,269,153 shares at
 October 30, 1999 and 488,922
 shares at January 30, 1999                   (242,684)        (8,238)
  Total stockholders' equity                 1,687,740      1,656,886
                                           $ 3,735,645    $ 3,179,266

 See notes to consolidated financial statements


                    STAPLES, INC. AND SUBSIDIARIES
                 Consolidated Statements of Cash Flows
                     (Dollar Amounts in Thousands)

                                                       (Unaudited)
                                                     39 Weeks Ended
                                               October 30, October 31,
                                                   1999        1998
Operating Activities:
 Net income                                      $ 195,592  $ 114,110
 Adjustments to reconcile net income to net cash
  used in operating activities:
  Minority interest                                   --         (135)
  Depreciation and amortization                    126,020     89,682
  Merger-related and integration costs                --       41,000
  Expense from 401K and PARS stock contribution     13,633      6,351
  Deferred income tax expense/(benefit)             24,630    (23,388)
  Change in assets and liabilities,
  net of companies acquired
  using purchase accounting:
  Increase in merchandise inventories             (150,260)  (177,353)
  Increase in receivables                         (184,997)   (74,394)
  (Increase)/Decrease in prepaid
   expenses and other assets                       (30,274)     4,501
  Increase in accounts payable, accrued
   expenses and other current liabilities          160,175    150,228
  Increase in other long-term obligations            5,146      7,267
                                                   (35,927)    23,759
Net cash provided by operating activities         159,665    137,869

Investing Activities:
 Acquisition of property and equipment            (251,114)  (254,140)
 Acquisition of businesses, net of cash acquired  (241,940)      --
 Proceeds from sales and maturities
  of short-term investments                         32,836     11,356
 Purchase of short-term investments                (16,651)    (6,899)
 Proceeds from sales and maturities
  of long-term investments                            --       18,995
 Purchase of long-term investments                 (23,756)    (2,545)
 Acquisition of lease rights                          (130)   (37,705)
 Other                                               2,170      2,994
 Net cash used in investing activities            (498,585)  (267,944)

Financing Activities:
 Proceeds from sale of capital stock                30,191     41,998
 Proceeds from borrowings                          745,501     26,171
 Payments on borrowings                           (470,164)   (53,598)
 Purchase of dissenting
  shareholder S-Corporation stock                     --      (48,102)
 Purchase of treasury stock                       (234,446)    (8,057)
 Dividends to shareholders
  of acquired S-Corp                                  --      (15,904)
 Net cash provided by/(used in)
  financing activities                              71,082    (57,492)

 Effect of exchange rate changes on cash                 9        124

Net decrease in cash and cash equivalents         (267,829)  (187,443)
Cash and cash equivalents at beginning of period   357,993    381,088
Cash and cash equivalents at end of period       $  90,164  $ 193,645

 See notes to consolidated financial statements.

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