Tesco’s purchase of stationer Paperchase puts 1,000 jobs at risk
AROUND 1,000 jobs at Paperchase are under threat after Britain’s largest supermarket swooped for the struggling stationery company in a deal expected to close stores.
Tesco said it had bought the Paperchase brand and intellectual property, and expected to start rolling out new products in its UK stores.
The announcement came just hours after Paperchase collapsed into administration yesterday. Jan Marchant, managing director of home and clothing at Tesco, said: “We have been building out plans to bring more brands and inspiration to the ranges we offer, and this will help us to take those plans further. We look forward to sharing more with our customers in due course.”
However, the deal is understood to not include Paperchase’s 100 stores, where it employs more than 800 people, or concessions, casting doubt on the future for an estimated 1,000 staff. Around 75 staff based at its head office in London have been made redundant for now. The deal came after Paperchase was unable to find a buyer for the whole business.
Pricewaterhousecoopers had been running a sales process in recent weeks, although Paperchase had also been lining up administrators at Begbies Traynor. The company said it had appointed Mark Fry, Kirstie Provan and Gary Shankland, of Begbies Traynor to handle the administration process.
Begbies Traynor said the sale reflected the interest in the brand and would mean it would still be seen in Tesco stores in the UK. It said it would keep trading Paperchase’s operations in the short term “with all stores remaining open and trading as normal”, and would be monitoring trading in the stores. It is planning to retain all staff in the Paperchase shops as they continue to trade – selling stock that is already in the shops – as well as those roles which keep the shops running.
However, unless a further deal is done for the stores, which may prove difficult without the Paperchase brand, 1,000 jobs are expected to be lost.
The deal is the latest twist for Paperchase, which only changed hands last August, when it was taken over by a consortium led by Jigsaw chairman and turnaround expert Steve Curtis. It had previously been rescued out of administration by Permira Credit, which bought the business in early 2021. At the time, Paperchase closed 40 stores. It now trades from just over 100 outlets.
The swoop by Tesco comes amid pressure on supermarkets to lure shoppers back after facing competition from discounters Aldi and Lidl. Figures released yesterday showed sales were up 6pc at Tesco – lower than the morethan-20pc growth at both Aldi and Lidl.