NEWS: OT Group to withdraw from the UK and Ireland

OT Group to withdraw from the UK and Ireland market with proposals to sell the Spicers brands to VOW Wholesale

After much speculation in recent weeks, OT Group has released a statement confirming its position and future plans for Spicers and Office Depot UK.

OT Group has confirmed it plans to withdraw the Spicers wholesale business from the market, and in a further development, OT Group is planning to sell the assets of the 5 Star brand to VOW Wholesale in the UK and Ireland.  The online Officeteam business and Office Depot UK will be sold to Paragon under the current proposals.

They make efforts to reassure current suppliers that they intend to pay in full all arrears ‘on reconciled and agreed balances’, although this will happen over an extended timeframe, expected to be in the region of 9 months.  Some key details from OT Group’s letter are as follows:

“The company has recently completed a comprehensive review of operations in the UK and Irish markets…

Following this review, the company believes that its contract customers will be better served through the sale of the Office Depot UK and Ireland businesses to Paragon, with product supply and distribution services being sourced via a third-party logistics model under a long-term contract with VOW Wholesale.

OT Group’s online Officeteam business will also be sold to Paragon under the current proposals.

After careful consideration of its wholesale business, operating under the Spicers brand, OT Group is proposing to withdraw from this market. Additionally, OT Group is proposing to sell the assets of the 5 Star brand to VOW Wholesale in the UK and Ireland.

…all suppliers […will receive] arrears in full on reconciled and agreed balances. The shareholders of OT Group are providing a substantial financial contribution to ensure that any loss to suppliers is mitigated.

So this process can take place in a managed and orderly manner, the directors intend to use a company voluntary arrangement (CVA) as a mechanism to facilitate the payments to creditors.

It is our intention to honour 100% of agreed balances; however, payments will be phased over a period of time – which we do not expect will be more than nine months. The CVA process will be overseen by an independent supervisor who will adjudicate on claims.”

This is of course another blow for the industry, but not surprising news considering the problems that have been rumoured in the industry for some time.

The Dealer Support team is reaching out to key individuals within the Spicers and OT business to share further clarification on what this means to the dealer customers and suppliers and will share further updates in due course.

if you would like to share any information or thoughts relating to this news you can do so, in confidence by emailing the team at info@intelligentmedia.co.uk or our editor Holly Tinsley directly at holly@intelligentmedia.co.uk.