Staples could be considering leaving Europe after its attempted $6.3 billion merger with Office Depot in May.
Chairman and CEO Ronald Sargent said in a first quarter earnings call that Staples has been challenged by weak results in Europe. The company is looking to narrow its focus and pursuing the best of opportunities by accelerating its growth in their asset-light businesses and pulling back in areas with less potential.
Sargent said that while Staples believes there is significant opportunity to generate value in the European market, they realize the best growth opportunities are in North America. As a result, they have decided to explore strategic alternatives for its European operations.
Staples International operations as a whole decreased 3% during the first quarter. In Europe, retail same-store sales declined 9% primarily driven by a decrease in customer traffic. In Staples’ contract business, local currency sales were down in a high-single digit during the first quarter. Its European online business in local currency was down in the low single digits.
The British newspaper The Telegraph reported that Staples has hired accounting firm KPMG to review its overseas operations. Many of its 107 UK stores are in poor retail locations, which would make it difficult to sell off and consumer confidence is lacking due to the recent vote to leave the European Union.