// Paperchase files notice to appoint administrators from PwC to advise on insolvency process
// The move towards administration driven by poor sales in November & December
// Paperchase launched a CVA restructuring last March in an attempt to turn around its fortunes
Paperchase is on the brink of collapsing into administration after sales were hammered by closures at the end of last year.
The stationery retailer, which has 127 stores and 1500 employees, confirmed it has filed a notice to appoint administrators from PwC to advise on its insolvency process.
Paperchase launched a CVA restructuring last March in an attempt to turn around its fortunes but saw this heavily impacted by the Covid pandemic.
It is understood the retailer’s decision to move towards administration was particularly driven by poor sales in November and December amid lockdown measures and tiered restrictions.
Typically, November and December trading account for 40 per cent of Paperchase’s annual sales.
The retailer said online sales had performed strongly but this had not been enough to mitigate the overall impact of temporary closures.
The announcement comes a day after the Prime Minister Boris Johnson announced the third English national lockdown, forcing all non-essential retailers to shut their doors once again.
A Paperchase spokesman said: “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 NOI (Notice of Intent to appoint administrators) is a necessary part of this work. This is not the situation we wanted to be in.
“Our team has been fantastic throughout this year and we cannot thank them enough for their support.”
with PA Wires