Essendant, a long-standing wholesale office supply company, is set to lay off nearly 1,300 employees across six states. The company is winding down its operations and preparing to close permanently. Concerns have arisen regarding Illinois employment law, as Essendant appears to have terminated hundreds of workers without the required 60-day notice under the state’s WARN Act. The Illinois Department of Labor is investigating these abrupt layoffs that occurred five weeks earlier than planned.
Essendant, previously known as United Stationers, evolved from a family-owned Chicago store to the nation’s largest independent office product wholesaler. In 2015, the company rebranded as Essendant but struggled under private equity ownership, facing challenges as remote and hybrid work environments increased. After an unsuccessful pivot last year towards cleaning supplies, Essendant issued a WARN notice on August 3, announcing closures at its Lincolnshire headquarters and Carol Stream distribution center, impacting 510 and 134 employees respectively. According to sources, on August 27, hundreds of employees were dismissed in a mass video call, preceding their termination date of October 3.
The Illinois Worker Adjustment and Retraining Notification Act mandates companies with 75 or more employees to notify both employees and the state 60 days before plant closures or mass layoffs. An investigation could result in Essendant being required to pay back wages and benefits to those affected by the early dismissals. A civil penalty of $500 for each day of violation may also apply. The Chicago-based law firm Strauss Borrelli is also investigating potential legal violations of state WARN laws related to these layoffs, inviting former employees who did not receive proper notice to explore legal options.
Additionally, WARN notices were issued on August 3 for the closure of facilities in Atlanta, Dallas, Phoenix, Philadelphia, Sacramento, and Los Angeles, amounting to a total of 1,278 layoffs. Acknowledging its difficulties, Essendant management communicated that they did not know if efforts to secure additional capital would succeed, hinting at a potential cessation of operations.
Essendant’s Origins and Decline
Essendant traces its roots back to 1906, starting as the Utility Supply Co. in downtown Chicago. The company transitioned through various ownerships and rebranding efforts, including a shift to the name United Stationers in 1960. In 1981, the company went public and later moved to Des Plaines. It was acquired by Wingate Partners in 1995, forming a significant comprehensive supplier network.
In 2019, the company became part of Sycamore Partners’ portfolio, along with Staples acquired in 2017. Despite generating $5 billion in annual sales, the pandemic and subsequent changes in work habits impacted Essendant’s business direction.
Essendant’s attempts to shift focus from office products to janitorial and foodservice supplies marked an ambitious but unsuccessful transformation. The closure of its Lincolnshire headquarters and six distribution centers signals the end of an era. Meanwhile, Sycamore Partners continues its business maneuvers in Chicago, acquiring Walgreens for $10 billion.
For Essendant, over a century in business is drawing to a close. The company, which relocated its headquarters to Lincolnshire in March, now finds its doors closing much sooner than expected.
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