Staples, the office supplier retailer, is reportedly looking to sell itself.
According to a report in The Wall Street Journal citing people familiar with the matter, Staples is in talks with a handful of private-equity suitors. Talks are still in the early stages, and nothing could come of them. The move comes less than a year after Staples failed in its efforts to merge with Office Depot. That deal didn’t happen over antitrust issues. The WSJ said that if a deal materializes Staples could be worth around $7 billion or even more.
Just like many other U.S.-based retailers, Staples has been shuttering stores and at the end of last year said it would sell a majority piece of its European business to Cerberus Capital Management, the private equity firm. What’s more, for 2016 Staples reported a decrease in annual sales, marking the fifth year in a row. The company has also lost greater than one-fifth of its market value during the year.
Staples has been closing stores and in December agreed to sell a majority stake in its European operations to private-equity firm Cerberus Capital Management LP, seeking a turnaround after a federal judge blocked its proposed $6 billion tie-up with Office Depot. The retailer reported its fifth straight drop in annual sales and has lost more than one-fifth of its market value the past year. Staples and other retailers have been getting beat up by Amazon and the huge movement toward online shopping and the digitization of work. In the late 1990s, Staples expanded at a rapid pace, offering better options and cheaper prices than mom-and-pop office supply stores, noted the WSJ. Bain Capital, the private equity company, was an early backer of Staples and in 1989 took it public via a IPO, noted the report.