Stationery chain Paperchase has revealed that it is on the brink of administration, after sales were impacted when branches were forced to close at the end of 2020.
The company has confirmed that it has filed a notice to appoint administrators from PwC to advise on its insolvency process.
The business, which has 127 stores and around 1,500 employees, went through a company voluntary arrangement (CVA) in March 2019 in a bid to cut costs.
Usually, November and December trading accounts for 40 per cent of the company’s annual sales. However, sales during this time were severely impacted due to lockdown regulations and tier restrictions.
‘Restrictions place unbearable strain on businesses’
A Paperchase spokesperson 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 a 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.”
Support for high street businesses
The announcement from Paperchase comes shortly after chancellor Rishi Sunak confirmed that further financial aid for UK businesses affected by the pandemic will be made available.
Around 600,000 retail, hospitality and leisure sites will be eligible to claim a one off grant of up to £9,000.
The payments are designed to help support high street businesses after a fresh wave of lockdown restrictions were revealed.
Sunak also announced a further £594 million for local authorities and devolved administrations to support businesses not eligible for the grants.
The Scottish government will receive £375 million, the Welsh government will receive £227 million and the Northern Ireland Executive will receive £127 million.
Sunak said: “Throughout the pandemic, we’ve taken swift action to protect lives and livelihoods, and today we’re announcing a further cash injection to support businesses and jobs until the spring.
“This will help businesses to get through the months ahead - and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”