According to a recent report, the chances of finding a buyer for the office footwear chain are rapidly diminishing. Initially, private equity investors had shown interest in the chain’s 100 stores, but it seems they have now backed away from making firm bids. Truworths, the South African retail giant that currently owns Office, was hoping for a quick sale. However, it appears that investment firms Aurelius and Alteri, who are known for their expertise in distressed companies, are no longer expected to make an offer for the chain.
Truworths purchased control of Office for £256 million five years ago. However, factors such as the uncertainty surrounding Brexit, the decline of physical retail, and the devastating impact of the coronavirus crisis have significantly reduced the chain’s value. In an attempt to facilitate the sale, Truworths hired advisory specialist Alvarez & Marsal. However, it is uncertain if the parent company will be willing to sell at a discounted price, especially considering its significant recent investments in Office.
Last year, Office considered a company voluntary arrangement (CVA), but eventually opted for a refinancing strategy and the closure of unprofitable locations. Unfortunately, in the year leading up to July 2019, Office experienced a significant decrease in sales by £13 million, bringing the total to £285 million. Additionally, profits saw a decrease of £10 million, totaling £15 million. With the future of Office now relying on the decisions made by Truworths, it is disconcerting that the company has yet to respond to requests for comment.