Last Updated on: 22nd November 2023, 01:08 am
Hope for Paperchase’s salvation is waning, with signs that the company will soon be in collapse. Chances of a solvent rescue are decreasing with every passing day.
Discussions between Paperchase’s owner and potential buyers are ongoing, but Sky News is aware that a pre-pack administration is the most probable outcome, potentially by Tuesday.
Paperchase, the prominent high street stationery retailer, is close to entering administration with diminishing hopes of a solvent settlement.
Sky News has learnt that the parent firm of the chain may be appointing insolvency practitioners from Begbies Traynor as soon as Tuesday.
🚨 BREAKING: Paperchase on brink of collapse as hopes of solvent rescue fade https://t.co/b30gjucTFq
— Neil Saunders (@NeilRetail) January 30, 2023
Shareholders of Paperchase are engaged in talks with some possible buyers; insiders report that the transaction is currently tilting towards a pre-pack arrangement, wherein the business’s assets are sold off immediately after entering administration.
It is uncertain how many positions or establishments would be in jeopardy due to an insolvency.
PricewaterhouseCoopers recently looked into finding new backers, leading to weeks of discussion with prospective investors. This has proven the latest development in the process.
Sky News recently reported that Paperchase was on the market, a mere four months after it had changed hands.
In August, Steve Curtis, an experienced retailer with expertise in acquisitions such as Tie Rack and Jigsaw, took charge of the chain.
Retail Realisation, an industry consultancy partnered with Mr Curtis and restructuring specialist Rcapital, was a major player in the deal reached last summer.
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Paperchase was one of many retail casualties of the pandemic, entering a pre-pack administration in January 2021.
The pandemic had severe consequences on the high street, with Debenhams and Arcadia Group – whose brands included Dorothy Perkins and TopShop – unfortunately ceasing trading.
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The company runs roughly 100 stores and, at the time of the latest acquisition, Mr Curtis was in support of a management plan to expand this number to around 150 within the next few years.
Permira Credit, the previous proprietor, injected capital into Paperchase’s online services as well as new store launches and executive recruitment since its financial woes ended.
Paperchase had a team of 1,300 and had stores in 125 places in the UK.
Its outlets included concessions in House of Fraser, Selfridges, and several Next locations.
It was uncertain on Monday what number of stores and occupations might be endangered by a further bureaucratic process.