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The majority of Paperchase stores are reportedly set to be rescued in a pre-pack deal that is poised to save around 1,000 jobs.
According to Sky News, the rescue deal will be led by private equity giant Permira, with a deal expected to be agreed later today (27 January).
Permira, which has helped fund the business since 2015, is expected to salvage 90 of the stationery chain’s 125 stores. Some redundancies will still be expected with the closure of the remaining sites.
An insider told Sky: “This is not a Boohoo-Debenhams deal by any means. There is a genuinely viable high street business which can emerge from the pandemic.”
The remark comes after Boohoo announced it would acquire the intellectual property assets of Debenhams in a £55m deal earlier this week (25 January). The transaction does not include Debenhams’ retail stores, stock or any financial services, meaning it is unlikely the majority of the stores’ 12,000 staff will be retained.
On the same day, Asos emerged as a frontrunner to purchase the Topshop, Topman, Miss Selfridge and HIIT brands, confirming it was in “exclusive talks” with Arcadia administrators. According to Sky, both deals are expected to cost over 10,000 jobs combined.
Reports that Paperchase called in administrators first emerged earlier this month.
A spokesperson confirmed to Retail Sector that a notice was filed to appoint administrators from PwC to oversee an administration process.
It comes as sales were damaged by the ongoing pandemic, with reports showing that during November and December, just under half of the retailer’s sales came from trade.
A spokesperson told Retail Sector: “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.”
They added: “We are working hard to find that solution and this NOI 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.”
