"Chicago is under-penetrated and underserved by office superstores," said Michael Miles, COO of Staples, during Tuesday's third-quarter conference call. "We plan to open about 20 stores in the market in 2005, starting in the first quarter."

By entering the Chicago market, Staples will be going toe-to-toe with Office Depot, the dominant player in the area--which also happens to be opening new stores in Staple's home turf of New England and elsewhere in the eastern United States. "Our team is fired up to go after that market aggressively," added Staples CEO Ron Sargent, referring to the foray into the Chicago area.

Whatever enthusiasm Staples has for its new venture comes in the wake of its third-quarter numbers. For the third quarter ended October 30, 2004, the retailer had net income of $209 million, a 26% increase versus the third quarter of 2003. Earnings per share were $0.41, or 24% higher than Q3 2003. The company reported total sales for the quarter of $3.8 billion, an increase of 12% versus the $3.4 billion reported for Q3 2003. North American retail comparable sales increased 4%, which, according to Sargent, were driven by increased customer traffic, strong performance in furniture, office supplies and copy center, and a solid back-to-school season.