Struggling stationery retailer Paperchase is facing an uncertain future after it emerged that the owners were considering a sale or administration less than six months after a previous buyout.
The retailer is said to have lined up the corporate restructuring firm Begbies Traynor as the administrator if talks to save the company fall through. There are currently 101 Paperchase stores in the UK and Ireland which employ around 800, including branches in Newcastle, Metrocentre and Durham. It is not known how many stores and jobs could be put at risk by another administration process.
Covid-19 and lockdown restrictions took Paperchase to the brink of collapse in January 2021, as sales fell due to reduced footfall. The accountancy firm PwC was appointed as the administrator and secured a rescue deal. The so-called 'pre-pack' administration deal meant the stationary firm could save around 1,000 jobs when the newly formed company Aspen Phoenix Newco took control of the firm.
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Pre pack administration is a formal procedure that enables an insolvent company to sell its assets as soon as an admininstator is appointed. The key factor that differentiates a pre pack administration from a regular company administration is that in a pre pack, a buyer is chosen and the sale negotiated before the administrator is appointed.
However, around 270 jobs were reported to be lost as the firm had to permanently close 27 of its sites, including one in Morpeth, Northumberland. At the time, the company employed 1,278 staff in stores, its London head office and in distribution.
Paperchase changed hands again in August last year by the retail entrepreneur Steve Curtis, chair of the fashion chain Jigsaw, who was backed by Retail Realisation. It currently employs 820 staff and has about 100 outlets, down from more than 150. Curtis is regarded as a turnaround expert who has worked previously with ailing retailers including Tie Rack and Feather & Black.
Paperchase told The Mirror: "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."
Paperchase was founded by art students Judith Cash and Eddie Pond in 1968, when they opened a store in Kensington, London. Since then it has changed hands several times, with WH Smith and the now-defunct US books retailer Borders among the chain’s previous owners.
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