Cerberus Capital and Sycamore Partners explore a deal to buy Staples

Private equity firms Cerberus Capital Management and Sycamore Partners are the only two suitors actively exploring a deal to buy US office supplies retailer Staples Inc, Reuters today reported, citing people familiar with the matter.

Other private equity firms like Clayton Dubilier & Rice, Advent International and Bain Capital have also held discussions with Staples but are now less actively pursuing a deal due to the challenges Staples faces in shifting its business model from serving consumers to catering to companies, the report said.

In recent years, Staples has been struggling due to digitisation and increased competition from online retailers including Amazon.com and big-box stores like Costco Wholesale Corp and Wal-Mart Stores.

After its failed attempt to buy Office Depot last year due to antitrust issues, Staples had announced cost-cutting plans and operational restructuring.

The Massachusetts-based company, which has 1,255 stores in the US and 304 in Canada, last year announced plans to sell around 60 stores in North America.

It sold its UK unit, which employs around 1,100 people across 106 stores to Hilco Capital, and a majority stake of its European operations to private equity firm Cerberus Capital.

Staples, which has a market value of $6.30 billion, is the largest retailer of office supplies, technology, furniture, safety supplies, medical supplies, copy and print services in the US.

The company operates throughout North and South America, Europe, Asia, Australia and New Zealand and has annual turnover of around $23 billion.