News World News

Sunday 21 April 2019

More than 1,000 jobs at risk as Office Outlet collapses into administration

The chain was formerly known as Staples but is not connected to the online-only business.

Office Outlet has gone into administration (Lewis Stickley/PA)
Office Outlet has gone into administration (Lewis Stickley/PA)

By Alys Key, Press Association City Reporter

Office Outlet has gone into administration, putting the future of 1,200 jobs at risk.

The retailer, which was formerly known as Staples, is not connected to the online-only business that currently trades under the Staples name.

Partners at Deloitte were appointed joint administrators on Monday.

It throws the future of about 1,200 people working at more than 90 stores into doubt.

Stores will continue trading while the business is marketed to potential new owners.

Joint administrator Richard Haws said: “In addition to a general downturn in trading as a result of the ongoing decline in the stationery market and UK retail in general, the company has recently experienced a reduction in credit from key suppliers, given the economic outlook which has severely impacted the financial position of the company.

“We are hopeful a buyer can still be found for the business in the coming weeks and we will continue to trade the business with that aim in mind.”

The chain launched a plan last August to shutter a handful of stores under a form of insolvency called a Company Voluntary Arrangement (CVA).

The deal also included three years of free rent on 20 sites.

But the move failed to save the chain, which is understood to have had trouble scraping together rent for its estate of more than 90 stores ahead of the due date on Friday.

Additional growth capital was required to continue delivery of the next stage of the management buyout business plan Chief executive Chris Yates

US-based stationery giant Staples agreed to sell its UK shops to Hilco Capital, the former owner of HMV, in late 2016.

The chain was then renamed Office Outlet, while a separate online business continues to operate in the UK under the name Staples.

In 2018, a management buyout led by chief executive Chris Yates took control of the company.

Mr Yates said: “Over the last two years the business has been transformed from the heavily loss-making old Staples business to a near break-even, modern multi-channel retailer.

“However, additional growth capital was required to continue delivery of the next stage of the management buyout business plan.

“Despite being highly impressed by the Office Outlet story, potential investors have held back due to retail sector sentiment and the general level of uncertainty.”

It represents another disappointing end to a former Hilco investment after the firm was forced to place HMV into administration late last year.

It was eventually sold to Canadian music business Sunrise Records, resulting in the closure of 27 locations including the original Oxford Street branch.

Press Association

Today's news headlines, directly to your inbox every morning.

Editors Choice

Also in World News