Paperchase on brink of administration

Paperchase has filed a notice to appoint administrators after facing a tough year of store closures.

The stationery retailer has performed strongly online, with many stores trading profitably, but this hasn’t been enough to mitigate the overall impact of UK lockdowns.

Recent restrictions which have forced non-essential businesses to close have hit the retailer particularly hard, with 40 per cent of Paperchase sales usually made in November and December.

This isn’t the only time the brand has struggled to stay afloat, back in 2019 the business went through a Company Voluntary Agreement (CVA) process, which cut rent costs by 50 per cent over three months for a number of its stores.

The business was cautiously optimistic after the initial lockdown in the first quarter of 2020, but the November restrictions had a significant impact on the business.

The company said that the decision wasn’t taken lightly but that the priority for the business is finding a solution for the long-term future of the brand.

A Paperchase spokesperson commented on the decision: “The cumulative effects of lockdown one, lockdown two – at the start of the Christmas shopping period – and now the current restrictions have put unbearable strain on retail businesses across the country.

“Paperchase is not immune despite our strong online trading. Out of lockdown we’ve traded well, but as the country faces further restrictions for some months to come, we have to find a sustainable future for Paperchase.

“We are working hard to find that solution and this NOI is a necessary part of this work. This is not the situation we wanted to be in. Our team has been fantastic throughout this year and we cannot thank them enough for their support.”

The retailer said that filing the notice would give the company the time it needs to work out the right shape of the business going forward.

PwC will run the administration process.

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