Three months after reports indicated that Staples was seeking a ‘Brexit’ of its own, the office supplies brand may be closer to finding a buyer for its European stores. Wall Street investment firm Cerberus is negotiating a “rescue deal” with Staples in which it would acquire all the retailer’s stores in Europe for a “nominal sum,” according to the British newspaper The Telegraph.
Although the stores have been on the market since Q2 — with CEO Shira Goodman indicating in an August investor call that the company had “met with a number of prospective buyers” — it appears Staples will continue to run its European e-Commerce operations itself.
It is unclear whether Cerberus would keep Staples stores open if a transaction took place. Cerberus, a firm worth more than $40 billion that has previously invested in troubled businesses, has yet to comment on the report.
Staples has been undergoing a repositioning in the wake of its failed merger attempt with Office Depot and its 14th straight quarterly sales decline. The merger fiasco resulted in the resignation of longtime Staples CEO Ron Sargent in June, and caused the retailer to burn more capital on a $250 million merger termination fee to Office Depot.
As part of the repositioning, the company is further emphasizing its North American B2B contract division, Staples Business Advantage, and is shedding off underperforming retail and European properties to cut approximately $300 million in costs by the end of 2018.
While comparable stores sales dipped 5% in North American locations in Q2, total sales in Europe took an even steeper loss at 7.5%. Given these results, it’s likely the brand simply hasn’t been selling enough product throughout its 250+ stores to justify the consistent losses.