OT Group reports a significant financial loss as it plans to exit the UK market.
- The group reported a pre-tax loss of £52.5 million for 2023, up from £15.8 million in 2022.
- Office Depot’s turnover decreased from £120.8 million to £109.8 million in the same fiscal year.
- Persistent low office occupancy and changes in work habits are cited as key challenges.
- The group’s UK operations are being sold, marking the end of its presence in the region.
OT Group, the parent company of Office Depot and Spicers wholesale brand, has announced its decision to exit the United Kingdom market amidst acknowledging severe financial losses. The group documented a pre-tax loss of £52.5 million for the year 2023, a stark increase from the £15.8 million loss recorded in the previous year. This comes after a historical pre-tax profit of £10.1 million in 2020, which sharply contrasts with subsequent declining financial performance, including a loss of £5.3 million in 2021. Recent filings indicated a significant turnover drop, from £120.8 million to £109.8 million.
This decision follows a comprehensive review of business operations in both the UK and Irish markets. The board attributed the decision to the protracted adverse trading conditions exacerbated by the shift towards remote working and persistently low office occupancy rates, which have failed to rebound to their pre-pandemic status. The statement affirmed that these trends significantly undermined demand for general office supplies, adding strain to their economic outlook.
Furthermore, the company has determined that a current oversupply in warehousing and distribution facilities within the UK’s office supplies sector is unsustainable. Amidst these strategic challenges, OT Group has confirmed that the operations of Office Depot within the UK and Ireland will be sold to PCC Global, alongside the Officeteam business and the disposal of Vow Wholesale assets within the region.
The workforce within the group has been reduced as a result of these business decisions. In 2023, employee numbers fell from 553 to 529, as the company streamlined operations in line with its strategic repositioning. This period of significant organisational transition underscores the challenges faced by traditional office supply businesses in adapting to changing market dynamics.
The OT Group’s move to exit the UK underscores the profound impact of evolving work patterns on traditional office supply businesses.
