Paperchase will outline a series of restructuring options to key creditors at two crunch meetings this week, Retail Week has learned.
The stationery and gift card specialist has invited landlords to attend one of two ‘town halls’, set to take place in London’s Canary Wharf on Thursday and Friday.
A company voluntary arrangement (CVA) is just one of the options set to be put forward by Paperchase’s senior management team.
Paperchase is understood to have already discussed its position with the British Property Federation and retail property body Revo ahead of the meetings.
Details of the town halls have emerged a week after reports that Paperchase had drafted in KPMG to draw up store closure plans.
In a letter sent to landlords and seen by Retail Week, Paperchase chairman Nick Wood said the business is “heavily dependent” on Christmas trade, but admitted sales during the festive period had been “disappointing” for “the third year in a row”.
Wood blamed “declining footfall” to stores as the main reason behind the ongoing decline.
As a result of the fall in sales, Paperchase warned “the business will likely require a significant restructure” if it is to survive. The retailer said it would focus on its UK store portfolio “in particular”.
Paperchase is yet to respond to Retail Week’s request for comment.
The business currently has around 130 UK stores and a further 30 in Europe and the Middle East, employing 2,000 staff. It also operates a number of concessions within Next stores.
In its last full-year figures, covering the 53 weeks to February 3, 2018, Paperchase suffered a 50% slump in EBITDA to £4.5m, despite a 5.6% uptick in total sales to £141.2m.
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