Coming as an extra unwelcome knock, after the confirmation of Lockdown 3 for non-essential retailers, was the news that Paperchase, one of the industry’s leading players, is seemingly edging towards going into administration.
The retailer, which has been trading from 173 stores and concessions, filed a Notice of Intent (NOI) which will see accountancy firm PwC being appointed to establish a restructuring of the business.
“This isn’t the end of Paperchase, but it gives 10 working days of breathing space to find the best way forward for a sustainable business,” Will Booth of Tulchan (the communications company brought on board to liaise with the media) told PG Buzz.
Will explained that January 20 is effectively ‘D-day’ after which PwC and the Paperchase board will announce the best course of action for the retailer.
In response to the national media’s coverage stating that administration is looming for the design-led chain, Will elaborated: “Administration is one solution, but it is not necessarily definitely happening.”
While Paperchase has been trading under a CVA since March 2019, the retailer remained ‘cautiously optimistic’ after the first lockdown. (https://www.pgbuzz.net/paperchase-is-on-course-to-re-open-70-further-stores-by-july-13/)
However, in common with many other retailers, the cumulative effects of the lockdowns, especially at start of the Christmas shopping period is cited as having put undue strain on the business, with 40% of Paperchase’s sales coming from November and December.
An official statement from the retailer relayed: “Paperchase is not immune despite our strong online trading. 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 NOI is a necessary part of this work. This is not the situation we wanted to be in.”
It is certainly not a situation Paperchase’s many card publishers wanted to find themselves, not just for the monies owed (for Christmas products as well as everyday invoices that have not been settled), but also the loss of a sizeable and prestigious retail customer.
As Ged Mace, managing director of The Art File commented: “While the writing has been on the wall for a while, it is such a shame on many levels, not just for the considerable losses we and other publishers stand to incur. Paperchase has been a longstanding bastion of great greeting card design, providing an invaluable stepping stone for many young publishers into the multiple scene as well as a good customer for many leading brands.”
Top: Paperchase’s Henley store.
