A retailer with four shops in Tayside and Fife is on the brink of collapse.
Stationery chain Paperchase is set to enter administration after sales were hammered by closures at the end of last year.
The firm confirmed it has filed a notice to appoint administrators from PwC to advise on its insolvency process.
Paperchase has 127 stores and 1,500 employees.
Its stores include Perth’s High Street, Overgate Shopping Centre in Dundee, Central Retail Park in Kirkcaldy and Market Street in St Andrews.
Poor festive trading
The firm launched a Company Voluntary Arrangement (CVA) restructuring in March in an attempt to turn around its fortunes but saw this heavily impacted by the pandemic.
It is understood the retailer’s decision to move towards administration was particularly driven by poor sales in November and December.
Typically these months account for 40% of the company’s annual sales.
It said online sales had performed strongly. However, this had not been enough to mitigate the overall impact of temporary closures.
Working to find a solution
The announcement comes a day after Prime Minister Boris Johnson and First Minister Nicola Sturgeon announced restrictions which force non-essential retailers to close.
A Paperchase 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 months to come, we have to find a sustainable future.
“We are working hard to find that 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.”
Bloodbath on the High Street
The pending administration of Paperchase follows the struggles of several retail chains during the Covid-19 crisis.
Debenhams will shut all its stores by March at the latest unless a remarkable rescue deal is secured.
Sir Philip Green’s fashion empire Arcadia has also entered administration.
Its plus-size clothing brand Evans became the first in the stable to be bought out of retail giant’s administration process in December. But the deal will not include brick and mortar stores, just the online business.
Several companies are eyeing bids for Arcadia’s Topshop operation. The future of its Dorothy Perkins, Burton, Wallis and Miss Selfridge brands is less certain.
Oasis and Warehouse wound up its retail business in April, with the loss of 1,800 jobs.
Argos also announced its intention to shut all standalone shops.
Meanwhile companies such as Marks & Spencer and River Island have also cut staff.