It’s sad time for another major brand in the UK, and potentially for their hard-working employees. Hopefully, the new owners coming in, will find a way of keeping them.
Office stationery brand Staples will disappear from the UK high street after its US owner (Staples Inc) sold the struggling business to restructuring specialists Hilco Capital for a “nominal sum”.
It seems that Staples in the UK, over the last few years, has been fighting a losing battling against super supermarkets and a plethora of leaner competitors in the digital marketplace.
Ultimately, the digital age has been blamed for taking its toll on the business, which recorded a pre-tax loss of £5m in its latest annual accounts to January 2015.
Earlier this week, we also discovered Office Depot, the other North American partner in the failed merger with Staples Inc, has also put its European operations up for sale. Including the UK’s Viking Direct.
The failed merger of these two global office products power houses has certainly taken its toll. With both organisations looking to sell off their loss making overseas operations to save cash and to concentrate their efforts on their profitable North American business.
What conclusions can we draw? Did Staples large store format become out of date and too costly, against its leaner competitors in the fast-moving digital age? Staples did try to move its business online, but was it too little too late?
And what about Viking Direct? They didn’t invest in large stores, like Staples. They sold initially through catalogues and later through slick online systems. So why is it they also seem to be struggling? Massive investment was made in warehousing and infrastructure, which allowed Viking to provide customers with same day delivery anywhere in the UK. Maybe this investment, has just not returned the expected levels of revenues and profit to make the model viable?
It’s really interesting for us, as we are an office supplies and printing solutions business, who operate a same day regional service throughout Lancashire. Our model is not too dissimilar to Vikings, although on a much smaller scale and with extra specialised services, such as our unique printing solutions.
Further down the line, I’m sure we would like to expand our service, into other regional areas of the UK. So, we will be following closely what happens to these two office supplies powerhouses in the near future, to understand exactly what went wrong, and why the two different models don’t seem to have worked out.