Staples Looking To Leave The UK By Ashley Armstrong
Staples, the US stationery chain, is considering pulling out of the UK market, in the latest blow to the UK’s struggling high street. The UK arm, which has 107 stores across the country, is dependent on its US parent, Staples Inc, for financial support in order to continue operating as a going concern.
However, after the US group’s $6bn (£4.53bn) attempted merger with US rival Office Depot was blocked by competition regulators earlier this year, Staples Inc is reviewing the future of its European operations, which includes around 200 stores, and plans to slash $300m (£226m) of annual costs.
Staples has struggled with years of declining revenue as demand wanes for traditional office basics like folders, ink cartridges and filing cabinets and as shoppers hunt for bargains online. However, a restructuring plan last year meant that UK sales grew by 7pc to £116m and it returned to the black with £3.4m of profits.
It is understood that KPMG has only recently been appointed to work on options which could include a sale of Staples’ UK business, financial restructuring, a potential company voluntary arrangement or administration.
A source close to the process said that all options were being reviewed but said that the shops were in poor retail park locations which would make it less appealing to a trade buyer.
Staples’ difficulty follows the collapse of high street chains BHS, Austin Reed and Store 21 in the past few months.
Retail experts have cautioned that it will become even tougher for bricks and mortar shops as the vote to leave the European Referendum is expected to knock consumer confidence in a market which is already grappling to adapt to changing shopping trends. KPMG declined to comment.
A spokesman for Staples Inc said: “After the proposed acquisition was blocked, on May 10, 2016 Staples announced we are exploring strategic alternatives for our European operations. This will allow the company to sharpen our focus and more aggressively pursue our mid-market growth strategy in North America, while right sizing our retail business. While this process remains on track, we have no additional details to share at this time.” http://www.telegraph.co.uk/business/2016/07/02/staples-looks-at-leaving-uk-after-failed-merger-bid/