// Paperchase has launched a formal CVA in a bid to cut rent prices
// 28 stores out of 145 will have rent costs cut by 50%
Paperchase has revealed it has launched a CVA process in a bid to slash rent costs.
Around 28 out of its 145 UK stores will have their rent costs cut by 50 per cent for three months.
Stores will ultimately either close down or continue to operate for a rent-free period.
Paperchase’s CVA launch follows a consultation process with its landlords regarding store restructure, and more affordable rent costs of certain stores.
The retailer’s CVA launch further emphasises the UK high street’s declining footfall, increasing rent costs, and decreasing consumer confidence.
Paperchase predicts it would suffer from a small loss thanks to closure of some under-performing stores.
The company will work closely with employees who will be affected by the store closures, and provide support for continued employment.
Paperchase’s management team have said the CVA launch was an equitable solution and a significant contributor toward the retailer’s sustainable future.
“We need to reshape our store estate in order to ensure a long-term, sustainable future for the business,” Paperchase chief executive Duncan Gibson said.
Paperchase will aim to achieve creditors’ approval on the proposal at a meeting in due course.
Meanwhile, the business will continue to operate as usual.