US owner of Staples sells UK arm to Hilco
18 Nov 2016
The US owner of Staples has sold its UK arm that employs 1,100 people across 106 stores, to Hilco for a "nominal" sum. According to Hilco, it was planning to phase out Staples-branded shops over the coming months.
Staples also had online and business-to-business operations.
Paul McGowan of Hilco, which is also the owner of entertainment retailer HMV, said, "While retail in the UK has been challenged recently, a team led by retail veteran Alan Gaynor will work alongside the existing management team to build a plan for success for the business," The BBC reported.
In May, following a forced abandonment of a $6.3-billion merger with fellow office supply giant Office Depot, on regulatory concerns, Staples put its European business under review.
According to Staples CEO Shira Goodman, the sale of the UK business was in line with its strategy of focusing on the North American and mid-market business.
She said Staples was continuing to make "good progress" on the rest of its European business, which allowed the company to "streamline our operations, sharpen our focus and more aggressively pursue our mid-market growth strategy".
A number of retailers had already closed or planned to close their UK shops, including department store group BHS, and clothing specialists such as Austin Reed, American Apparel and Banana Republic.
The Telegraph quoted Goodman, "Agreeing to sell our UK retail business to Hilco aligns with our strategy of focusing on our North American and mid-market business, and is a meaningful step in that process." She added that the company is still "evaluating strategic alternatives for the remainder of Staples Europe"
Staples had struggled for years with declining revenue and falling demand for traditional office basics such as folders, ink cartridges and filing cabinets, and as shoppers looked of bargain offers online. However, under a restructuring plan last year, UK sales grew by 7 per cent to £116 million and the business bounced back with profit of £3.4 million.
