Staples Inc. sold its U.K. business for “nominal proceeds,” a move that experts say may be followed by other embattled retailers that want to shed unprofitable businesses to focus on their core lines.
The deal, announced on Thursday with Northbrook, Ill., Hilco Capital Ltd., a restructuring and turnaround investor, allows Staples to get rid of underperforming assets without having to search for a strategic buyer that might never materialize or deal with the distraction and expense of winding it down, experts say.
Staples’ U.K. business generated $302 million in sales over the last fiscal year but just $177 million during the first nine months of the current year, and consisting of more than 100 locations. The operating loss narrowed to $6 million from $17 million last year.