Retailer on brink of administration

Stationery chain Paperchase is set to enter administration after sales were hammered by closures at the end of last year.

The firm, which has 127 stores and 1,500 employees, confirmed it has filed a notice to appoint administrators from PWC to advise on its insolvency process.

Pa perchase has four shops in Tayside and Fife.

Its estate includes branches in Perth High Street, the Overgate Shopping Centre in Dundee, Central Retail Park in Kirkcaldy and Market Street in St Andrews.

The firm launched a Company Voluntary Arrangement ( C VA ) restructuring in March in an attempt to turn around its fortunes but saw this heavily impacted by the pandemic.

It is understood the retailer’s decision to move towards administration was particularly driven by poor sales in November and December amid lockdown measures and tiered restrictions.

Typically, November and December trading account for 40% of the company’s annual sales.

It said online sales had performed strongly but this had not been enough to mitigate the overall impact of temporary closures.

The announcement comes a day after Prime Minister Boris Johnson and First Minister Ni cola Sturgeon announced restrictions forcing nonessential retailers to shut their doors again.

A Paperchase spokesman said :“The cumulative effects of lockdown 1.0, lockdown 2.0 - at the start of the Christmas shopping period – and now the current restrictions have put unbearable strain on retail businesses across the country.

“Paper chase 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 (Notice of Intent to appoint administrators) 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 pend ing administration of Paperchase follows the collapse of several retail chains during the Covid-19 crisis.

Debenhams will shut all its stores by March at the latest unless a remarkable rescue deal is secured.

Sir Philip Green’s fashion empire Arcadia has also entered administration.

Its plus- size clothing brand Evans became the first in the stable to be bought out of retail giant’s administration process in December. But the deal will not include brick and mortar stores, just the online business.

Several companies are eyeing bids for Arcadia’s Topshop operation. The future of its Dorothy Perkins, Burton, Wallis and Miss Selfridge brands is less certain.

Edinburgh Woollen Mill and its Peacocks brand are currently in administration. The Forfar Peacocks shop has already closed.

Oasis and Warehouse wound up its retail business in April, with the loss of 1,800 jobs.

Quiz in Kirkcaldy, Size? in Dundee and Phase Eight in Perth all closed last year.

Argos also announced its intention to shut all standalone shops.

Meanwhile, companies such as Marks & Spencer and River Island have also cut staff.

STRUGGLING: Paperchase has filed a notice to appoint administrators from PWC to advise on its insolvency process.