Paperchase has launched a company voluntary agreement (CVA) proposal after bringing in advisers from KPMG in January.

Under the retailer’s CVA proposal, up to 28 of its 145 stores would have rents slashed by 50% for a three-month window, after which stores will either be shut or continue to operate for a rent-free period.

The bulk of the retailer’s stores will continue to trade, with more than half receiving rent reductions under the proposal. 

The upmarket stationery chain will work with employees affected by the closures to ensure their continued employment within the business.

Paperchase will need to secure over 75% approval from creditors for the CVA proposal to be put into action, with the vote on the proposal scheduled for March 22.

Paperchase chief executive Duncan Gibson said: “Paperchase is a much-loved brand, with a loyal customer base and a fantastic design-led product offer. However, we need to reshape our store estate in order to ensure a long-term, sustainable future for the business.

“We have decided to take decisive action now to ensure we’re able to succeed in the future. We believe this is in the best interests of the company, our people, creditors and our customers.”

KPMG reconstructing partner and supervisor of the CVA Will Wright said: “Over the last 50 years, Paperchase has grown to become one of the UK’s most well-known and innovative design-led stationery retailers.

“However, like many other businesses in the retail sector, the company has been adversely affected by a cocktail of well-documented issues, including a reduction in footfall, increased rents and business rates, and margin pressure from sterling depreciation.”