An investment of over $3 million in real estate coupled with a bold move into e-commerce has placed local office supplies store, Staples Ltd., in pole position to become a leader in its field.

The company has moved into electronic commerce and Staples president and CEO Michael Johnson is enthusiastic about the new direction of the company.

And he said that the company's move into new premises in Pembroke could see productivity soar by 25 percent and delivery time slashed.

Mr. Johnson claims the high tech move has already seen BELCO Holdings Limited out-source their entire stationery requirements including books and journals to Staples and will soon see the Bank of Bermuda completely shut its supplies warehouse.

The company is still putting the final touches on their new offices in their newly acquired warehouse on Pitts Bay Road, Pembroke.

Staples bought the SRT Building for more than the advertised price of $3.2 million in a deal the company said was "a very fair price''.

Mr. Johnson said buying the property proved cost effective. He said: "I think one of the unique things about the Bermuda marketplace is the need to control your destiny around real estate, because it is so limited and your options are so few, especially if you are an expanding business, which we are.

"I think you need to roll that into your future strategy, consider real estate as part of your future strategy because you don't have the option of, on short notice, going out and renting more space that works for you.

"Quality warehouse space that has good workflow is at a very limited premium on the Island.'' While Mr. Johnson admitted that the new facility at 20,000 square feet was not much larger than the old premises, he described it as having more "functional space''.

"Our ability to access and move small packages around is greatly improved,'' he said. "The space that we had in the other building was about the same but it just wasn't laid out as efficiently as this one is.'' He estimated that the improvement could translate to as much as a 25 percent increase in productivity, Mr. Johnson agreed that faster delivery service could be a result.

"It allows us to pick up and process an order quicker than we could in the other building,'' he said. "We should be 15 to 20 percent more efficient, maybe even as much as 25 percent.'' The improvements, according to Mr. Johnson, are putting Staples on track to become `the office of the future'. "I think from both a technology point of view around office equipment and digital connectivity and the ability for our customers to see, process, order and do business with us online, we are evolving an office of the future type concept,'' he said.

"And not just in equipment but in how people communicate with us, order from us and do business with us,'' he continued."We really can be an office of the future.'' The entire Staples office is interconnected, a move Mr. Johnson says makes good bottom line sense.

"There is a lot of efficiency and a lot of cost savings in utilising today's technology around digital connectivity. In the office equipment business we use printers copiers and facsimile machines and if we are going to sell that technology we also have to be able to utilise it.'' Mr. Johnson is able to boast that Staples is the first local office supplies store to offer this on-line service to its customers.

Staples invests in its future Mr. Johnson revealed that discussions are underway with about a half a dozen prospective clients to handle their office supply needs.

The Bank of Bermuda and Belco Holdings Limited are the two largest businesses taking advantage of the new service offered by Staples.

Staples began a phased takeover of the Bank's office supplies function last October. This August the Bank's warehouse will close and Staples will assume total control over the function.

According to Roy Hollway manager of purchasing and stores for Belco Holdings Limited, the move makes good sense as it allows professionals to specialise in the areas of expertise.

"We at Belco want to concentrate and stick to our core business which is generating electricity,'' he said.

"It has been more cost effective for us to have Staples step in and provide the service. We feel their service has been excellent,'' he continued.

According to Mr. Johnson, the electronic service eliminates some of the major administrative nightmares associated with ordering as each client orders from its customised electronic catalogue.

While the on-line service at present is only available to large vendors, Mr.

Johnson estimated that within the next two years retail clients would be able to access an electronic catalogue on Staples website.