Specialist stationery and greeting card retailer, Paperchase, has formally launched a CVA following weeks of speculation. The company, which is owned by private equity firm, Primary Capital had already appointed KPMG at the start of this year to help it find a way forward.
Five of the company’s stores are expected to close but for now the business will operate as usual.
Rental costs were at the heart of Paperchase’s decision to enter a CVA following consultation with landlords. The high street business, which operates from 145 stores around the UK, will now see rents reduced by 50% in 28 of its stores for the next three months and is seeking rents linked to turnover in around half of its outlets.
The Paperchase management team, headed up by CEO, Duncan Gibson, has said it believes the CVA is the best solution if it is to survive as a business in a more sustainable way. A vote will be taken on the CVA proposal on March 22 and will require the approval of at least 75% of creditors if it is to move forward.
Accounts filed at Company’s House showed that Paperchase’s pre-tax profits fell from more than £600,000 in 2017 to a loss of £6.3 million last year.
