After 50 years on British high streets Paperchase is on the brink of falling into administration, after a very difficult year for the specialist greetings card and stationery retail chain.
The second lockdown in November was a bitter blow for the retailer, which makes a large proportion of its sales in that month.
Along with other retailers deemed ‘non-essential’, Paperchase also had to close most of its 127 stores over the Christmas trading period, putting 1,500 jobs at risk. The retailer has 173 outlets in total when concessions are included.
Forty percent of Paperchase’s sales are made during November and December and strong online trading has not made it immune to the effects of lockdown.
The company has filed a notice to appoint administrators PwC whilst it works out a rescue plan and suppliers to the retailer will be anxiously awaiting further details in what has been an exceptionally tough trading year for the industry.
Paperchase said: “The cumulative effects of lockdown one, lockdown two – at the start of the Christmas shopping period – and now the current restrictions have put unbearable strain on retail businesses across the country.
“Out of lockdown we’ve traded well, but as the country faces further restrictions for some months to come, we have to find a sustainable future for Paperchase. We are working hard to find that solution and this [notice of administration] is a necessary part of this work. This is not the situation we wanted to be in.”
The company has been struggling for some time and went through a Company Voluntary Arrangement (CVA), in March 2019 in an effort to cut costs and ease debts. It cut rents at 100 stores and halved costs at 28 sites for three months. A further 70 stores had their rent tied to turnover and others were closed completely.
The retailer’s losses widened from £6.3m to £10.3m for the year to February 2019 and turnover fell 5pc to £125m. The business now has ten working days to find a solution.
