Stationery chain Office Outlet falls into administration

Office Outlet, the stationery retailer formerly belonging to Staples, has collapsed into administration, putting 1,000 jobs at risk.

In the latest sign of industry stress on Britain's high streets, the retailer yesterday drafted in administrators from accountancy firm Deloitte, throwing the future of 1,000 jobs and 90 stores into doubt.

The stationary giant approved a controversial restructuring process in August, known as a company voluntary arrangement (CVA), which included a three-year rent holiday for a number of its stores.

Yet the UK chain, which Hilco Capital bought off of Staples in late 2016, now looks set to close a swathe of stores after launching huge sales and announcing its administration on its website.

Hilco now controls a minority holding, with a management buyout conducted in September last year that was led by chief executive Chris Yates.

According to Deloitte, the business is now being marketed for sale and the stores will keep trading whilst a buyer is sought.

Richard Hawes, joint administrator, said: "In addition to a general downturn in trading as a result of the ongoing decline in the stationery market and UK retail in general, the company has recently experienced a reduction in credit from key suppliers, given the economic outlook which has severely impacted the financial position of the company…We are hopeful a buyer can still be found for the business in the coming weeks and we will continue to trade the business with that aim in mind."

Chief executive Chris Yates said: "Over the last two years the business has been transformed from the heavily loss-making old Staples business to a near breakeven modern multichannel retailer. However, additional growth capital was required to continue delivery of the next stage of the management buyout business plan. Despite being highly impressed by the Office Outlet story potential investors have held back due to retail sector sentiment and the general level of uncertainty."