Sunday 19 August 2018 10:51 pm

Former Staples chain Office Outlet to close stores in new CVA filing

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Stationery chain Office Outlet, formerly known as Staples, is set to launch a Company Voluntary Arrangement – an insolvency procedure to reduce stores and costs – tomorrow and close a selection of its 96 UK stores.

Sources today told Sky News that the retailer, which was bought by restructuring fund Hilco in 2016, will request a three-year absolution from paying rent from landlords at about 20 of its stores.

The impact on retail jobs is expected to be minor, though one landlord said Office Outlet will need to cut the average size of its stores by about two-thirds to make way for paying tenants.

Read more: Amazon eyes Homebase stores marked for closure

The British Property Foundation is understood to have been asked to support the CVA, while Deloitte will act as an advisor.

The news comes as 2018 has seen an unprecedented spate in CVAs amid a troubled time for retailers on UK high streets. Chains such as Carpetright, Homebase, Mothercare, New Look and Prezzo have all implemented CVAs in recent months, utilising them as a means of ditching unprofitable stores.

Embattled department store chain House of Fraser is also understood to have explored the possibility of a CVA, before accepting a buyout deal from Sports Direct owner Mike Ashley.

Read more: House of Fraser owed millions to major brands before collapse

Hilco, which is thought to own a minority stake in the chain, did not respond to requests for comment.

The British Retail Consortium last week reiterated calls for government to implement a two-year freeze in business rate increases to ease pressure on the high street.

Chancellor Philip Hammond said he is mulling a so-called Amazon tax for online retailers, in an attempt to even out the stark divide between digital and physical retail sales.