A rescue deal for the troubled company may see stores closing in the UK.
The Daily Telegraph reported that Cerberus, an investment firm and “one of Wall Street’s most powerful hedge funds”, is in talks to rescue Staples in Europe, but there is doubt that Cerberus, which is a New York company, will keep the stores open, and this will affect more than 100 stores in the UK.
Staples UK posted £4.2 million (€4.7/$5 million) of losses on £220 million (€246/$271million) of sales for January 2015, and the newspaper added that the saving grace may be that Staples UK has an online business and a “business-to-business division”, which are both “profitable” and may be seen as “having a more viable future”. A senior spokesman noted that Cerberus “will assess the competitiveness of every part of the business but it is fair to say that some areas are more promising than others”.
Staples has been trying to reduce its overheads since the failed merger with Office Depot , and with over “200 stores in 16 countries” will try to do that by closures to save $300 million (€272 million). The article also noted that financial firm KPMG had been “appointed to review the future of the European business” this year which caused rumours that Staples would either “pull the plug on the business” or try to restructure and make huge cutbacks.
Since the age of the internet and online buying, “the office supplies market” has struggled to catch up and has seen a decline in demand, with the article adding that despite this, Cerberus “thinks there are opportunities to provide new products and services to existing customers”. The investment firm has more than $40 billion (€36 billion) “under management”, and it uses this to help companies that are in trouble.