It continues to be rough going for Staples after its failed merger with Office Depot.
The office supplier is considering shuttering its 107 stores in the United Kingdom as part of a larger evaluation of its European strategy in the wake of the failed merger and the UK.’s decision to leave the European Union, according to a report in the British newspaper The Telegraph.
The company has 259 stores in Europe, including the UK. locations, and as with its stores in the US. has fought challenges in the face of a changing retail world that leads consumers and businesses to shop online. A recent restructuring helped return the company’s UK. operations to being profitable, but the recent turmoil that has resulted from the ‘Brexit’ vote and the uncertainty about the economic fallout raises questions about the turnaround’s sustainability.
Staples was considering shutting its UK. stores even before Brexit, but the vote to leave the EU hurt the case to keep them open. On Tuesday the British pound hit another 31-year low, falling 1.3% to $1.3139, which erodes the profits of US. companies doing business in the country.
According to the report, Staples is considering a sale of its UK. stores, but the poor locations of the stores may make them unappealing to potential buyers.
This comes as the company is trying to reposition itself in the US. after a federal judge in early May blocked Staples’ planned merger with Office Depot. Last month the company announced it would be rolling out a new same-day delivery option to customers in a variety of cities– including New York, Los Angeles and Chicago — in a bid to keep up with the new consumer trend spearheaded by Amazon and Google.
“After the proposed acquisition was blocked, on May 10, 2016, Staples announced we are exploring strategic alternatives for our European operations,” Staples spokesman Bill Durling said in a statement. “This will allow the company to sharpen our focus and more aggressively pursue our mid-market growth strategy in North America, while right sizing our retail business. While this process remains on track, we have no additional details to share at this time.”
Staples’ shares were down 3,5% to $8.53.
By Eli Blumenthal for www.usatoday.com