The retailer has completed the sale of its European business to Cerberus Capital Management.
The Recycler reported last year that Cerberus, an investment firm and “one of Wall Street’s most powerful hedge funds”, had been in talks to rescue Staples Europe. Financial firm KPMG had been “appointed to review the future of the European business” , which caused rumours that Staples would either “pull the plug on the business” or try to restructure and make huge cutbacks, as it has been trying to reduce overheads since the failed merger with Office Depot.
In December Staples and Cerberus confirmed they had “entered into an agreement in relation to the sale of a controlling interest in Staples’ European operations” to a Cerberus “affiliate”, with the business including “retail, contract, and online businesses in 16 countries generating aggregate annual sales of approximately €1.7 billion ($1.8 billion)”.
Staples will retain a “15 percent equity interest”, and be represented on the board of directors, with the next step to “consult relevant European works councils […] in accordance with applicable law”. Depending on the consultations and “satisfaction of other conditions, the parties anticipated closing the transaction during the first quarter” of the next financial year.
Now, both companies confirmed in a press release that the sale had been completed, with Cerberus’ affiliate purchasing a “controlling interest in Staples’ European operation, while Staples will retain a 15 percent “equity interest”. The business has been “separated into a privately-held company” operating as Staples Solutions B.V. (or Staples Solutions).
Olof Persson, “an executive with Cerberus’ operations team and the former President and CEO of Volvo Group”, will become Chairman of Staples Solutions, with additional board members including Mayer also confirmed.
Shira Goodman, CEO and President of Staples, commented: “With the close of this deal, Staples’ global customers with a European presence will have their business needs met through the comprehensive services Staples Solutions will offer, while we will be able to fully devote our resources to growing our business in North America.”
Steven F. Mayer, Co-Head of Global Private Equity and Senior Managing Director of Cerberus, added: “We see great value in Staples Solutions and are confident that the company’s core strengths, when combined with an unwavering commitment to its customers and suppliers and Cerberus’ hallmark operational rigor, will strengthen Staples Solutions’ position as the leading provider of workplace products, services, and solutions to small, mid-sized, and large businesses in Europe.
“We have spent months getting to know the company and working side-by-side with its management team and its associates. Today, we are even more enthusiastic about our strategy to invest in key growth areas designed to improve the company’s competitiveness, position it for long-term sustainable growth, and capture opportunities that emerge from changes in the workplace products industry.”
Last year, it was reported that the UK arm had been sold to a restructuring company, Hilco, which was expected to close the stores, stating that it “was planning to phase out Staples-branded shops over the coming months”, though the fate of its online and B2B operations were not discussed, and a potential 1,000 jobs could be lost.
However, earlier this week The Recycler reported that the company had instead rebranded the Staples stores as Office Outlet, the firm adding that the Staples stores would be transformed in “record time”, and that “the entire rebadging process, along with the installation of a new EPOS system, is due to be completed by the end of this week”.
The “fresh branding” on the stores “is in keeping with Staples’ traditional red and white colour scheme”, Hilco added.