Paperchase: 27 stores axed & 250 job cuts as details of rescue deal revealed

37 Paperchase stores axed & 500 job cuts as details of Paperchase rescue deal revealed
Paperchase hired administrators from PwC earlier this month, after it saw sales slide on the back of significantly lower footfall amid coronavirus restrictions.
// Paperchase’s rescue deal details confirmed: 1000 jobs saved but 27 stores to shut down
// Prior to its administration, reports suggested Paperchase had 127 stores
// As much as 250 redundancies will be made from the rescue deal and store closures

Details of Paperchase’s rescue have been revealed after it secured a pre-pack deal to save 1000 jobs and shut down 27 stores after it tumbled into administration.

It comes after Paperchase hired administrators from PwC earlier this month, after it saw sales slide on the back of significantly lower footfall amid coronavirus restrictions.

After speculation earlier this week, the stationery and greeting cards retailer confirmed that 250 redundancies will be made – out of a workforce of 1250 – as a result of the rescue deal.


READ MORE: 1000 jobs saved as Paperchase rescued in pre-pack deal


This means 1000 jobs will be saved, and Retail Gazette understands that 27 stores will be shut permanently.

It is still not yet clear how many Paperchase shops will remain, but with previous reports suggesting it had 127 stores before it went into administration, it’s thought that the retailer’s store portfolio will be slimmed down to 100 after the closures.

However, Retail Gazette understands discussions on Paperchase’s store estate are still ongoing, and the portfolio could potentially end up being slimmed down to 90 stores.

The administrators confirmed that newly-formed company Aspen Phoenix Newco, which is backed by Permira Debt Managers, would take control of Paperchase.

The group said the rescue deal would retain its position in the UK retail landscape, “albeit in a smaller and more streamlined manner”.

Its new owners said that a “comprehensive transformation programme” was currently under way to help it rebound once restrictions lift.

“The cumulative impact of lockdowns and related restrictions means that it is imperative we make this tough but necessary decision to safeguard Paperchase’s future,” Paperchase chief executive Olly Raeburn said.

“In taking this action, we are giving ourselves the best opportunity to ensure that the business is fit for purpose in this new retail environment.

“We have been in close dialogue with all of our stakeholders through this process and are grateful for their continued support.

“We, of course, recognise that this affects many of our colleagues and we will do all we can to assist them during this difficult time.”

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6 COMMENTS

  1. As someone who made redundant by paperchase yesterday, I am currently struggling to see any truth in Olly Raeburn’s statement:
    “We, of course, recognise that this affects many of our colleagues and we will do all we can to assist them during this difficult time.”
    250 members of staff were made redundant on one single short conference call. The ‘assistance’ since then has been notable by it’s absence.

  2. Couple of years ago Permira pumped lots of money into Paperchase to stay floating, these were the times when Permira pumped lots of money into Kinaxia as well as Permira group wants to get into the logistics, transport and retail sector more. Hence when Permira invested into Kinaxia and afterwards into paperchase they made paperchase to change their transport partner, which paperchase had for years, to Kinaxia transport. Permira has been “inside” Paperchase for a very long time, dont think this is an hero act, and if you have only half a sense of a pigeon you will save yourself from a sinking ship while you can.

  3. From THE TIMES over the weekend: Private equity giant Permira was hailed as the saviour of Paperchase last Thursday when its debt management business bought the stationery chain out of administration in a pre-pack deal that saved 1,000 jobs.
    While most staff are being kept on, others have not been so lucky. The company, which was advised by PwC, plans to trim its supplier base. Those it wants to keep on have been asked to take a “haircut” to their debt — and not the Mohican kind.
    Mark McCormack, co-founder of party accessories provider Talking Tables, says he was offered just 15 per cent of the £28,000 he was owed if he agreed to continue supplying Paperchase.
    “It’s a pretty unpleasant way of doing business, ” says McCormack, 57, who has decided to walk away.

    McCormack points out that Permira Debt Managers, which declined to comment, had provided funding to the retailer since 2015. Its messy involvement at Paperchase is in stark contrast to a glossier story it has spun at the other end of the high street.

    Permira has pocketed about £1billion from Friday’s float of Dr Martens, the bootmaker of choice for skinheads, pubks and now Instagram stars. That’s atidy return eight years after it bought Doc Martens for £300 million – a a chunky kick in the teeth for Paperchase suppliers.

    ……

    As an 88 year old private Landlord they failed to pay rent due on 1 Dec, 1 Jan and therefore 1 Feb while still in occupation. We are declining their offer of a turnover only / three year with two year break commitment – leaving them with no risk or responsibility. Fortunately I have another tenant waiting to take over the property on original terms. This after their CVA wrote off all debts only 18 months ago. The passing of ownership between investors to enable owners to repeatedly walk-away from their responsibilities is immoral.

  4. Registration of a Charge filed 3 February 2021. Debenture filed at Companies House in the name of Sanne Group UK Limited, as security agent. Why, so soon are Permira putting in place a higher position in the ‘pecking order’ for repayment for a creditor?

  5. The new owner of Paperchase has chosen not to mention the scheme of reviewing the acquisition of the failed company’s assets to the connected parties. Permira Debt Managers, the credit arm of the nicknamed private equity firm and the secured creditor of Paper Chase, a stationery company that collapsed last month, has acquired key assets in its business through prepack management. – Times 12 Feb 2021

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