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News Release

Staples, Inc. Reports Second Quarter Results
WESTBOROUGH, Mass.--August 13, 1998-- Staples, Inc. (NASDAQ:SPLS), today announced a 33% increase in earnings per share before merger related charges for the second fiscal quarter ended August 1, 1998 to $0.12 per share as compared with $0.09 per share in the prior year. For the six months in the year to date period, earnings per share before merger related charges rose 26% to $0.24 per share as compared with $0.19 per share in the prior year period.

In the fiscal 1998 quarter and year to date periods, merger related charges were recorded for the acquisition of Quill Corporation. In the fiscal 1997 quarter and year to date periods, merger related charges were recorded for the attempted merger with Office Depot, Inc. Historical data has been restated to reflect the acquisition of the Quill Corporation under the pooling of interests method of accounting.

Total sales for the second quarter of fiscal 1998 rose 24% to $1.5 billion from $1.2 billion. For the six months in the year to date period, sales rose 27% to $3.1 billion from $2.5 billion in the prior year period. Comparable sales in the 669 stores and delivery hubs that have been open for more than one year increased 14% for the quarter and 13% for the six month period.

Thomas G. Stemberg, Chairman and CEO commented, "Staples has again achieved some of the best results in all of the retail industry including our seventeenth consecutive quarter of earnings per share growth of over 30%. These results are truly extraordinary given our continued substantial investments in long-term sales and earnings growth in what is our seasonally slowest quarter."

He continued, "During the second quarter we opened 48 new stores which set a new company record. In addition, we completed the acquisition of the Quill Corporation which further strengthens our mail order operations and creates exciting new opportunities both domestically and abroad."

The Company ended the quarter with 652 stores in the United States, 114 stores in Canada, 44 stores in the United Kingdom and 20 stores in Germany for a total of 830 stores worldwide.

Staples, Inc. is a $5 billion retailer of office supplies, furniture and technology to businesses from home based businesses to Fortune 50 companies in the United States, Canada, the United Kingdom and Germany. Staples, headquartered outside Boston, Mass., invented the office superstore concept and is the largest operator of office superstores in the world today. The Company, which has grown earnings per share at a 38% compounded rate over the last four years, has over 32,000 employees serving the business customer through 830 office superstores, mail order catalogs and a contract business.

More information may be obtained from the Company's Investor Relations department by dialing (800) INV-SPL1 or from the Company's website at http://www.staples.com.

Certain information presented within this press 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 the Company's most recent filing on Forms 10-K and 10-Q on file with the Securities and Exchange Commission.



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

                              (Unaudited)            (Unaudited)
                             13 Weeks Ended        26 Weeks Ended
                         August 1,   August 2,   August 1,   August 2,
                           1998        1997        1998        1997

Sales                   $1,475,705  $1,192,339  $3,146,316  $2,485,060
Cost of goods sold and
 occupancy costs         1,120,780     905,718   2,403,376   1,893,773
   Gross profit            354,925     286,621     742,940     591,287

Operating and other 
  expenses:
 Operating and selling     213,969     181,264     469,617     379,862
 Pre-opening                 4,232       2,316       7,584       5,178
 General and 
  administrative            70,694      55,174     138,180     102,205
 Amortization of 
  goodwill                     927       1,049       1,851       1,621
 Merger-related and
  integration costs         41,000       9,103      41,000      29,665
 Interest and other 
  expense, net               5,920       5,892      10,614       9,828
   Total operating and 
    other expenses         336,742     254,798     668,846     528,359

   Income before equity 
    in loss of affiliates
    and income taxes        18,183      31,823      74,094      62,928
 Equity in gain/(loss) 
  of affiliates               --          --          --        (5,953)

   Income before income 
    taxes                   18,183      31,823      74,094      56,975
 Income tax expense          9,319       9,120      29,330      14,495
   Net income before 
    minority interest        8,864      22,703      44,764      42,480
  Minority interest            110          56         160          56
   Net income               $8,974     $22,759     $44,924     $42,536


 Historical net income 
  per common share           $0.03       $0.08       $0.16       $0.16

 Historical net income 
  per common share 
  assuming dilution          $0.03       $0.08       $0.16       $0.15

 Pro forma:
  Historical net income                $22,759     $44,924     $42,536
  Provision for income 
   taxes on previously 
   untaxed earnings of 
   pooled S-Corporation 
   income                                3,182       1,814       7,730
  Pro forma net income                 $19,577     $43,110     $34,806


   Pro forma net income 
    per common share                     $0.07       $0.15       $0.13

Pro forma net income per
 common share assuming 
 dilution                                $0.07       $0.15       $0.13

Number of shares used 
 in computing historical
 and pro forma net 
 income per 
 common share        282,639,460  270,155,123  282,639,460  269,600,845

Number of shares used 
 in computing historical 
 and pro forma net 
 income per common 
 share assuming 
 dilution            291,033,327  279,191,526  289,161,513  278,271,092



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

                                              August 1,    January 31,
                                                1998          1998            
                                             (Unaudited)             

ASSETS
Current Assets:
  Cash and cash equivalents                 $    93,762   $   381,088
  Short-term investments                          1,443         5,902
  Merchandise inventories                     1,293,654     1,124,642
  Receivables, net                              254,641       203,143
  Prepaid expenses and other
   current assets                                80,825        71,365
       Total current assets                   1,724,325     1,786,140

Property and Equipment:
  Land and buildings                            195,378       150,947
  Leasehold improvements                        327,476       292,128
  Equipment                                     334,041       304,177
  Furniture and fixtures                        197,821       173,711
       Total property and equipment           1,054,716       920,963
  Less accumulated depreciation and
   amortization                                 352,915       310,701

       Net property and equipment               701,801       610,262

Other Assets:
  Lease acquisition costs, net
   of amortization                               77,695        43,244
  Investments                                      --          16,450
  Goodwill, net of amortization                 135,818       139,753
  Other                                          35,229        43,013
       Total other assets                       248,742       242,460
                                            $ 2,674,868   $ 2,638,862

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable                          $   701,198   $   672,956
  Accrued expenses and other current
   liabilities                                  310,523       266,023
  Debt maturing within one year                   4,443        43,501
       Total current liabilities              1,016,164       982,480


Long-Term Debt                                  205,935       218,959
Other Long-Term Obligations                      48,708        42,803
Convertible Debentures                          300,000       300,000
Minority Interest                                   (25)          135
Stockholders' Equity:
  Preferred stock, $.01 par
   value-authorized 5,000,000 shares; no
   shares issued Common stock, $.0006
   par value-authorized 500,000,000 shares;
   issued 284,483,644 shares at August 1, 
   1998 and 278,159,308 shares at 
   January 31, 1998                                 170           167
  Additional paid-in capital                    631,967       593,883
  Cumulative foreign currency translation
   adjustments                                  (12,792)      (10,315)
  Unrealized gain/(loss) on short-term
   investments                                        2         1,056
  Retained earnings                             492,977       510,040
  Less: treasury stock, at cost, 352,948
   shares at August 1, 1998  and 59,149
   shares at January 31, 1998                    (8,238)         (346)
       Total stockholders' equity             1,104,086     1,094,485
                                            $ 2,674,868   $ 2,638,862



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

                                                     (Unaudited)
                                                   26 Weeks Ended
                                                August 1,   August 2,
                                                  1998        1997
Operating Activities:
  Net income                                  $  44,924    $  42,536
  Adjustments to reconcile net income
   to net cash provided by/(used in)
   operating activities:
    Minority interest                              (160)         (56)
    Depreciation and amortization                45,725       45,943
    Equity in loss of affiliates                   --          5,953
    Net decrease in deferred tax assets          (7,098)     (10,665)
    (Increase)/decrease in assets:
      Merchandise inventories                  (169,012)    (134,318)
      Receivables                               (56,419)      (2,655)
      Prepaid expenses and other assets           8,616       (5,390)
    Increase in accounts payable, accrued
     expenses and other current liabilities      78,706      128,442
    Increase in other long-term obligations       6,242        3,234
                                                (93,400)      30,488
  Net cash (used in)/provided by
   operating activities                         (48,476)      73,024

Investing Activities:
  Acquisition of property and equipment        (136,713)     (78,820)
  Proceeds from sales and maturities of
   short-term investments                        11,313       10,061
  Purchase of short-term investments             (6,854)        --
  Proceeds from sales and maturities of
   long-term investments                         18,995        3,430
  Purchase of long-term investments              (2,545)      (3,505)
  Acquisition of businesses, net of
   cash acquired                                    --       (77,808)       
  Investment in affiliates                       (1,075)      (1,606)
  Acquisition of lease rights                   (36,690)      (2,402)
  Other                                            (544)       2,059
  Net cash used in investing activities        (154,113)    (148,591)

Financing Activities:
  Proceeds from sale of capital stock            38,654       11,500
  Proceeds from borrowings                           38      762,914
  Payments on borrowings                        (52,082)    (677,375)
  Purchase and retirement of
   S-Corporation stock                          (48,102)        --
  Dividends to shareholders of acquired
   S-Corporation                                (15,601)     (14,257)
  Other                                          (7,892)        --
  Net cash (used in)/provided by
   financing activities                         (84,985)      82,782

  Effect of exchange rate changes on cash           248         (727)

Net (decrease)/increase in cash and
 cash equivalents                              (287,326)       6,488
Cash and cash equivalents at beginning
 of period                                      381,088      117,035
Cash and cash equivalents at end of period    $  93,762    $ 123,523



     CONTACT: Media Contact:                     
              Jean Papagni                       
              Manager of Public Relations        
              (508) 370-8468                     
              jean.papagni@staples.com           
                      or
              Investor Contact:                          
              Samuel J. Levenson, CPA                    
              Vice President of Investor Relations       
              (508) 370-7963                             
              sam.levenson@staples.com