High street stationery chain Paperchase on brink of collapse
PAPERCHASE, the high street stationery chain, has lined up administrators as it races to find a buyer and stave off collapse.
The retailer, which has more than 100 stores and employs 820 staff, has placed Begbies Traynor on standby to advise on options, which include a pre-pack administration.
However, Paperchase stressed it is still considering a solvent sale as a going concern and has had interest from a number of possible suitors.
An administration would mark the second time Paperchase has collapsed in two years. It was subsequently bought by Permira Debt Managers, one of its backers. It changed hands again last August when it was snapped up by the retail entrepreneur Steve Curtis, who has previously worked with Jigsaw and Tie Rack.
Paperchase’s most recent set of financial accounts show it posted a £10.3m loss before tax in the year to Feb 2019, deepening from a loss of £6.3m the previous year.
Sales fell to £125.3m, down from £131.2m in 2018.
A spokesman for Paperchase said: “We confirm that we have retained BTG and PWC to advise Paperchase on strategic options, including the sale of the business as a going concern to new owners. Talks are continuing with a number of interested parties.
“All Paperchase stores and the website will continue to trade as normal during this period.
“We can’t comment further on this process until discussions with interested parties have been concluded.”
The talks come after a series of PR gaffes by the retailer in recent years, including its decision to stop advertising in the Daily Mail after a backlash from supporters of Jeremy Corbyn, Labour leader at the time.
The advocacy group Stop Funding Hate encouraged social media complaints against the company after it ran a promotion on the front of the newspaper offering readers free wrapping paper.
Last year, The Daily Telegraph revealed that 51 of the company’s 57 multipacks of Christmas cards were made in China, where Christians are routinely persecuted.