Over the past five years, the office supplies and business supplies industry has seen some dramatic changes. The introduction of Amazon Business, a venture set up by e-commerce mammoth Amazon, has left many retailers and resellers attempting to try and keep up with its growing pace. Aside from Amazon, overall competition is fierce too, with existing providers like Viking, Euroffice, Staples and challengers from larger brands like Post Office Shop all staking their claim in a competitive market.
But with recent reports suggesting that the UK based retailer Office Outlet is seeking further investment and the confirmation made over in America that the owner of Staples Inc, Sycamore Partners, have completed the acquisition of office products wholesaler, Essendant – are we seeing the brick-and-mortar based office supplies battleground now shifting onto the world wide web instead?
A story first broke by The Times, it was revealed late last month that private equity firm, Hilco, are searching for new investment with its Office Outlet stores. According to their article, the CEO of Office Outlet, Chris Yates, penned a letter to potential investors late last month in an attempt to raise further funds towards a new strategy for the business.
Since the sale of Office Outlet to Hilco in 2016 and our article detailing how Office Outlet was subletting its stores, the business formerly known as Staples hasn’t been able to gain the footing it once held on the office supplies industry.
The company registered a CVA agreement in August last year, meaning that many of its worst performing stores were downsized or in many cases, closed on a permanent basis. Some of the remaining stores were given a reduction in rent once the agreement had been confirmed, but recent comments made by Yates suggests that a new strategy which requires further funding is needed to help maintain company finances.
Since the closure of some of its stores, Office Outlet has been able to keep 94 of its outlets, including its online presence, trading as normal. Yates states however that the firm is still looking to open smaller stores in an overarching strategy to grow underlying earnings by £10 million over the next three years.