Paperchase rescue safeguards 1,000 jobs
Stationery chain Paperchase has been bought out of administration in a deal rescuing up to 90 of its 127 stores. The sale to a newly incorporated company, Aspen Phoenix NewCo, means that about 1,000 of its 1,500 employees will keep their jobs.
Paperchase chief executive Ollie Raeburn said the deal was “tough but necessary” to secure the firm’s future. He said it had suffered from “the cumulative impact of lockdowns and related restrictions”.
The second lockdown in November came at a crucial period for the firm, which makes a high proportion of its sales then. Just under half its sales, 40%, come from trade in November and December.
On 5 January, the firm filed a notice to appoint administrators, a move designed to give it breathing space from its creditors while it worked out a rescue plan. In its latest announcement, Paperchase said the sale had been completed following the appointment of PwC as administrators.
The business has been sold in what is known as a pre-pack administration after seeing a collapse in sales due to the lockdowns and restrictions on the High Street. This allows for continuation of the business and the ability to safeguard jobs while avoiding the need to liquidate the company.
The chain is the latest of a string of high-profile retailers to hit trouble in the past year. The sector was already battling with the shift to online sales, coupled with rising costs, including rents and higher minimum wages. Coronavirus restrictions which shut non-essential shops piled on the pressure. Paperchase said that under its new ownership, it would remain “an omni-channel business, albeit with a smaller, more relevant, retail footprint”.