Stationery chain Paperchase is on the brink of collapsing into administration, after sales dropped dramatically following Covid-19 restrictions closing some stores at the end of last year.
The firm, which has 127 stores – including 12 in Scotland – and 1,500 employees, confirmed it has filed a notice to appoint administrators from PwC to advise on its insolvency process.
Paperchase launched a Company Voluntary Arrangement (CVA) restructuring last March, but since then the business has been heavily impacted by the pandemic.
A 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.”
The statement explained that management is working to find that solution and the appointment of administrators is a necessary part of the plan.
“This is not the situation we wanted to be in,” it added.