As reported by several media outlets, the administration of Paperchase is approaching after financial difficulties have continued to plague the stationery firm.
Office Supplies Blog has learned via Reuters that UK stationery retailer Paperchase are on the brink of entering administration, with muted sales over the festive period and the ongoing COVID-19 pandemic being regarded as the key causes for a filed administration notice.
The administration of Paperchase would bring a substantial blow to the stationery firm, who have been established for 50 years and has physical stores set up across several areas of the world, including 20 outlets across Europe and Canada and 20 other stores in the Middle East.
Should the administration of Paperchase be made official this week, it will place nearly 1,500 jobs at risk.
Administration of Paperchase Not Aided by Previous Difficulties
Whilst much of the blame in regards to the potential administration of Paperchase is being placed on a difficult Christmas sales performance and the tightened restrictions placed on retail during the current Coronavirus pandemic, it isn’t the first time the company has experienced financial struggles.
In January 2019, Paperchase began exploring the option of a CVA (Company Voluntary Agreement) in order to help their plan to restructure their business model due to a huge slash in overall profit margins in 2018.
Whilst it was hoped that undergoing a CVA would help to recover parts of the lost revenue that Paperchase experienced within this period, the situation has since worsened due to rapidly falling footfall and an overall struggle in operating physical stores within the current pandemic restrictions.
As a result, the administration of Paperchase has now become the primary option for the company, with administrators being appointed from the firm PwC.
Paperchase Not Immune from Financial Strain Despite Online Trading
Whilst the stationery retailer does operate an online store alongside its physical retail units, the sales from their website only serves to cover a small fraction of the company’s overall revenue, as a spokesperson from Paperchase explains.
“The cumulative effects of lockdown 1.0, lockdown 2.0 – at the start of the Christmas shopping period – and now the current restrictions have put unbearable strain on retail businesses across the country.
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 Notice of Intent to appoint administrators is a necessary part of this work.”