Paperchase shops face closure in Tesco rescue as deal only includes the name and intellectual property
Tesco has bought Paperchase following the beleaguered retailer’s collapse into administration.
The supermarket giant swooped on the wreckage of the stationery brand after its collapse – but the deal only includes the name and intellectual property, not the stores.
That means the future of 106 shops in the UK remains in doubt along with 820 jobs.
Jobs threat: Tesco swooped on the wreckage of the stationery brand Paperchase after its collapse – but the deal only includes the name and intellectual property, not the stores
Jan Marchant, managing director of home and clothing at Tesco, said: ‘Paperchase is a well-loved brand by so many, and we’re proud to bring it to Tesco stores across the UK.’
She said the purchase will boost its plans to ‘bring more brands and inspiration to the ranges we currently offer’.
The prospect of more than 800 job losses at Paperchase came as a shake-up at Tesco threatened 2,100 of its own staff.
Hot food counters and delis are being scrapped by Tesco at stores across the country as part of a wider cost cutting shake-up.
Begbies Traynor, the joint administrators for Paperchase, said a hunt for a buyer of the whole company including the shops proved fruitless.
The stationer had been in talks with prospective suitors for weeks, with PricewaterhouseCoopers hired to find a buyer.
Begbies Traynor said yesterday that ‘no viable offers’ were received for the company or its assets.
‘However, this sale reflects the interest in the well-known and established brand and will enable the brand to continue in Tesco stores across the UK,’ the insolvency practitioners added.
Paperchase outlets will remain open and trade as normal for now, with administrators promising ‘further updates will be provided in due course’.
Buyout: Tesco’s Jan Marchant (pictured) said Paperchase is a ‘well-loved’ brand
Retail investor Steve Curtis, who has been involved in Tie Rack and Jigsaw, snapped up the brand as recently as August, before it was put up for sale. He had hoped to see the retailer hit 150 stores over the next few years.
But the company collapsed yesterday after years of feeble sales.
Its stores in transport hubs were hammered by the pandemic, with many commuters still shying away.
Although Paperchase’s brand and product range were strong, its notebooks and greetings cards were being sold in the wrong places, according to Sophie Lund-Yates, analyst at Hargreaves Lansdown.
Tesco’s acquisition ‘makes sense’ as it has ‘the ability to take the good side of Paperchase, which is its reputation and cult following, and inject some flexibility into the business model’, Lund-Yates said.
‘The strong brand presence of Paperchase makes it one of very few stationery providers that could prosper in a physical store setting, given enough of a chance.’
The brand shut 37 stores after falling into administration in 2021 as lockdowns took their toll.
In its heyday, Paperchase had concessions at Selfridges, Next and House of Fraser.
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