As the shift to online shopping claims more casualties office supplies mainstay Staples has agreed to be sold to Sycamore Partners a private equity firm.
Staples was one of the most prominent names in office supply retail before online e-commerce retailers such as Amazon reshaped how consumers shop.
Sycamore Partners specializes in retailers and owns others such as the Limited, Hot Topic and Talbots. The company said on Wednesday that it would spend $6.9 billion to acquire what it called an iconic brand.
Nevertheless, Sycamore will take control of a company that is in a state of decline. Sales as well as gross profits at the company have dropped each of the past four years, while during the same time, Staples has shrunk its store count.
Staples has tried to stay competitive online by merging with Office Depot another chain, but that deal did not receive the approval of a federal judge and the effort was abandoned last year.
In the company’s latest annual report, Staples was open about challenges it was facing. After it noted that it competes with local stationery stores and wholesalers, it spoke about other challenges such as Amazon.com, Walmart and Target, warehouse clubs like Costco and electronics stores like Best Buy.
In its annual report the company said it planned to shutter another 70 stores in 2017 across North America.
The board and its management made the decision to sell after company shareholders had lost faith in the overall business as shares had dropped to $7 early in 2017, having plunged sharply from $18 per share in 2015.
Investors received some solace from the deal, as the offer by Sycamore of $10.25 per share was a 20% premium above the stock price for the company in the early part of April, prior to the initial reports surfacing of a possible deal to sell the business that helped lift shares.
Sycamore and Staples did not make their executives available on Wednesday to speak with the media.
Even though sales overall are in decline, Staples sells large volumes of electronics, printer cartridges and paper.
Last year its revenue was $18.2 billion down almost $3 million from five years ago.
For a business that is associated with the big-box stores, Staples’ brick and mortar sales are the minority. Over $10.6 billion in sales last year were delivered, in comparison to approximately $6.6 billion in sales at stores.