Paperchase has swung to a loss and earnings have been halved as footfall plunged across their UK stores amid an increase in online sales.
According to new accounts filed at Companies House, for the financial year ending February 3 the stationery retailer recorded a statutory pre-tax loss of £6.3 million, compared to a profit of £613,000 the prior year, while EBITDA fell from £9 million to £4.5 million.
Meanwhile, sales increased 5.6 per cent year-on-year to £131.2 million, boosted by a 29.5 per cent surge in online sales partly thanks to partnerships with Amazon, Asos and Ocado.
International sales also increased to 12.8 per cent during the year, thanks to Paperchase expanding in Canada and the Middle East along with wholesale partnerships in Norway and Thailand.
Paperchase attributed the fall to restructuring costs linked to the impairment in value of a handful of stores.
Chief executive Duncan Gibson said the retailer was now focusing on continuing to evolve from a “primarily UK-centric store business to a multi-channel, multinational business”, which will involve re-investing in its ecommerce arm and closing some UK stores while opening others.
Paperchase is poised to end the year with 239 stores, of which includes 145 standalone UK stores, 42 UK concessions, and 53 international concessions or franchise stores.
Last month, it was revealed that Euler Hermes, one of Paperchase’s main credit insurers, had withdrawn its cover any new contracts with suppliers.
Insurers cut their cover of retailers when they anticipate that they may go bust before they are able to pay their suppliers.
However, Gibson told The Times that Euler Hermes only worked with less than 10 of its 500 suppliers.
“We are a good commercial partner and we always have been and our business has not missed a beat as a result of that,” he said.