Office Outlet to Undergo Restructure

Office Outlet WP

After an initial announcement regarding the closure of several stores in the UK, Office Outlet have now outlined their further restructuring plans.

Following their purchase by restructuring experts Hilco in 2016, Office Outlet have launched a CVA (Company Voluntary Agreement) which shows plans of intent to seek rent-free tenancy for up to 20 of it’s 90 stores. Additionally, the plans will also include closure of its stores which class as worst performing and any remaining stores will have a reduction in rent if they confirm the agreement.

Office Outlet in the UK Retail Environment

With many well-established high street stores being forced to close their doors for good recently, Office Outlet CEO Chris Yates spoke more of the challenges that the company has faced in the UK. “Given the challenging UK retail environment and our over-spaced and over-rented UK store estate, we are having to take tough but necessary actions to reduce our fixed cost base and restore long-term profitability.”

The tough decision wasn’t taken lightly and should ensure better security for the company’s employees, customers and suppliers, as Yates further comments. “We have held constructive discussion with our key landlords and strategic partners and will now seek creditor approval on our CVA proposal. This will provide greater security for our staff, suppliers, landlords, customers and members.”

Deloitte to Handle the CVA

Within the restructuring plans, a nominee has been appointed to help with the implementation of the CVA. The delicate nature of the CVA is being handled by Business advisory firm Deloitte, who hope to ensure the process runs smoothly as Deloitte Partner, Daniel Butters explains. “The CVA will provide a stable platform upon which the management’s turnaround plan can be delivered. It is important to stress that no stores will close immediately, and employees and suppliers will continue to be paid on time and in full.”

Another Victim of the Online Shopping Revolution?

The announcement of Office Outlet’s restructure and CVA follows the likes of House of Fraser, Mothercare, Homebase and Toys R Us. All the aforementioned companies have seen a sharp decline in footfall, profits and overall shares during the last decade, with much blame passing to the rise of online retail. As Onbuy.com’s Managing Director, Cas Paton stresses, it may have become a matter of ‘adapt or die’ when it comes to brick and mortar retail businesses. “People love the ease and confidence of selling and buying online now. We allow traders to sell stock at a competitive price. It’s also beneficial for the customers as well, considering we are a marketplace, they can compare prices from different retailers. Shops on the high street need to adapt if they want to compete with online retailers and therefore survive in today’s digital age.”

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