The Joint Administrators of office supplies retail business Office Outlet have announced the imminent closure of its 94 retail stores.
The business, which entered into administration in March, will be dissolved due to the search for a potential buyer for their stores coming to an unsuccessful end.
A winding down process has now been put into action which will result in closure of all of Office Outlet’s 94 retail business stores and the loss of up to 1,176 job positions as part of the measures.
Joint Administrators of the Office Outlet retail business, Deloitte’s Richard Hawes and Daniel Butters commented on the decision being made to initiate liquidation of the stores, explaining:
“Despite undertaking a focused marketing a process that built on an extensive marketing process that had been on an extensive marketing process that had been run by the directors ahead of our appointment, there was a very limited interest in a sale of the business and assets of the companies, in whole or in part.”
CVA Unable to Stop Office Outlet Closure
During September 2018, Office Outlet entered into a CVA (Company Voluntary Arrangement) in a bid to take pressure of it’s multiple store rental costings.
It was thought that this along with a £27 million write off of its debts by minority owner Hilco would prevent an Office Outlet closure.
But the difficult trading conditions experienced by many on the UK high street currently and regular underperformance of the business overall only worsened its standing in the office supplies market, further adding to the pressures on its business structure.
Acquisition of the Business and It’s Assets Also Unsuccessful
Whilst Office Outlet did continue to trade all the way towards the end of April whilst placed in administration, it was hoped that Deloitte would be able to seek a buyer in order to salvage their office supplies retail stores.
However, 40 of its stores had already been permanently closed at this point along with the main distribution centre being completely vacated (the remaining stock was shipped to its at the time operating stores).
It was reported that one offer was made in order to acquire the Office Outlet business operations but was deemed as not being able to provide enough sufficient value to warrant the sale.
As of current writing, Deloitte’s report indicates that there is only one sole secured creditor of the Office Outlet business, a Hilco-owned entity listed as OO Retail.
The report states that they are owed just over £12 million pounds, but due to the Office Outlet closure, it is unlikely that this will be repaid to them in full.
Additionally, Deloitte cite that there are up to 154 unsecured creditors involved with the Office Outlet business and that these are owed more than £13 million between them each.