Wed, 06 Jan 2021 | ADMINISTRATION
Cards and stationary retailer Paperchase has filed notice of intent to appoint administrators, saying that COVID-19 restrictions had put “an unbearable strain on the business”. The company, which is owned by private equity firm Primary Capital and has 173 UK stores and concessions, has lined up accountancy firm PwC to handle the administration.
Paperchase is not classed as an essential retailer, so was forced to close all stores during the spring lockdown, the second lockdown in November and December and in areas that were later put into tier 4.
With the business typically generating 40 per cent of its annual sales in November and December, the second lockdown was particularly damaging. The latest lockdown means its stores have once again been forced to close.
The company underwent a CVA in March 2019 and said that many stores had continued to trade profitably and that online sales had performed strongly, but these factors were not enough to offset the cumulative impact of COVID-19.
Other possible contributors to the retailer’s distressed position include the rise of online card retailers such as Moonpig and Funky Pigeon and its strong presence in travel hubs, such as railway stations, which have seen drastically reduced footfall during the pandemic.
A company spokesperson said: “The cumulative effects of lockdown one, lockdown two – 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 is a necessary part of this work.”
In its most recent financial report, for the year ended February 2 2019, the company reported turnover of £125 million, down from £131 million a year earlier, gross profit of £14 million and a £3.4 million loss for the financial year.
Its fixed assets at the time were valued at £14.4 million, current assets at £16.4 million and net assets at £2.8 million.
The news of Paperchase’s imminent administration came hours after Chancellor Rishi Sunak announced a £4.6 billion package of financial assistance to support UK businesses through the third lockdown.
View the latest distressed UK businesses here.
Well-established business operating for over eight years. Specialises in the online sale of both own-brand and leading brands of gardening and horticultural supplies across the UK. Enviable client base comprising a number of long-standing relationshi...
RELOCATABLE
This is a well established and well used local post office situated in a densely populated area of East London. The area surrounding the business is extremely busy through the week and weekends due to the travel links and leisure facilities close by.
LEASEHOLD
Offers an extensive selection of quality products, including pitched and flat roof windows, composite and uPVC windows and doors, and roofing products. Works with leading manufacturers to supply premium, branded products, many of which are exclusive...
FREEHOLD
20
|
Jan
|
Modulaire Group extends UK presence with Carter acquisition | BUSINESS SALE
Modular space leasing business Modulaire Group has announced...
19
|
Jan
|
Injection moulding business sold out of administration to employees | BUSINESS SALE
Conwy-based injection moulding company A2B Plastics Limited ...
18
|
Jan
|
AFH Financial Group ready to return to acquisition trail in 2021 | BUSINESS NEWS
In its yearly report to October 2020, wealth manager and adv...
Sign up to receive our acquisition alert emails to get your FREE guide
27
|
Oct
|
Dog treats company acquired by Spectrum Brands | BUSINESS SALE
Nottingham-based pet treat and toy maker Armitage Pet Care h...
18
|
Mar
|
Laura Ashley enters administration as virus hits funding hopes | ADMINISTRATION
Home furnishings and fashion retailer Laura Ashley has filed...
13
|
Aug
|
Forensic science equipment supplier completes MBO | MBO/MBI
A private equity firm has backed the management buyout of a ...
Business Sale Report is your complete solution to finding great acquisition opportunities.
Join today to receive:
All this and much more, including the latest M&A news and exclusive resources