Potential bidders eye up Paperchase amid store closures

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Paperchase CVA
// Paperchase’s parent company Primary Capital has had talks with potential bidders
// It joins French Connection, HMV and Sofa.com as one of the few UK-based retailers up for sale

Paperchase’s parent company Primary Capital has had talks with potential bidders in the last few days after it reportedly called in advisers from KPMG to explore a potential CVA.

KPMG has reportedly been in contact with prospective bidders this week about a deal which could see it change hands for the first time in nearly 10 years, Sky News reported.

Sources speaking to Sky News said that considering a sale would include investigating a pre-pack administration, an insolvency process which involves shedding liabilities before a company is acquired by new owners.

Paperchase now joins French Connection, HMV – which went into administration – and Sofa.com as one of the few UK-based retailers which are up for sale.

A meeting was held on Thursday in London, and KPMG discussed the principle of CVAs with a number of Paperchase’s landlords.

In the past year, Carpetright, Mothercare, and New Look have been among the high street names to have launched CVAs.

Paperchase currently runs 145 of its own stores in the UK, as well as 75 concessions in the UK, Europe and north America.

KPMG is understood to have told potential bidders that the new investment would require some changes to Paperchase’s business model, the closure of loss-making stores and a shift to a variable rental arrangement.

‎However, it remains unclear as to how many of Paperchase’s stores were likely to face closure under any CVA proposal.

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