British High Street suffers its latest casualty

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The death of the British High Street has long been predicted and, while the situation is not so dire as that, it is losing another chain from its pavements.
American stationary speciality Staples has announced it is selling off its UK arm, which consists of 106 physical stores, employing a workforce of 1,100 people.
The firm has struck a deal with Hilco, a UK multinational which specialises in restructuring and refinancing other companies. Hilco will be buying the UK arm for what was described as a “nominal sum”.
Hilco, which has already been involved in the closure of 23 Staples stores, has already indicated it will be phasing out Staples-branded shops over the next few months. Staples does, however, also have an online presence as well as running business-to-business operations.
Paul McGowan, CEO of Hilco said that while there was no doubt the UK retail sector was facing challenging times, his team would be working alongside Staples own leadership team to put together a strategy of “success for the business”.
Staples had already indicated that it was facing challenging times. In May, it placed the European arm of its business under review following the scraping of a planned $6.3 billion merger with Office Depot, which it was unable to complete on competition grounds.
Staples CEO Shira Goodman said Staples was now concentrating on its North American market.
She added that the company was currently streamlining operations, sharpening its focus and pursuing its mid-market growth strategy in a much more aggressive manner.
The deal with Hilco follows speculation that Staples was in discussions with New York-based investment firm Cerberus with regard to the sale of its entire European arm.
It’s UK business has recently reported pre-tax losses of £5 million for the year to January 2015, which was down a whopping £2.1 million from the year before. It’s online function and business-to-business operations, however, have been more lucrative than its physical stores.
The announcement from Staples comes amid a turbulent time for the British High Street.
Already, the department store BHS has closed its stores, and High Street favourite Marks & Spencer has announced it is shutting down some of its shops, or changing the focus from clothing to its more lucrative food arm. Austin Reed, American Apparel and Banana Republic have also announced closures.
The latest casualty follows positive retail sales figures, which were up 7.4 per cent year on year.

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