A retail rescue deal has brought more uncertainty for workers in Tayside and Fife.
Not all shops and jobs will be saved despite a deal to save Paperchase from collapse.
The stationary chain is set to be sold through a pre-pack administration to a private equity firm.
The arrangement with Permira Debt Managers, which has provided funding to the business for the past five years.
But not all of the shops will be saved.
Two-thirds of jobs to be saved
Paperchase has 125 stores, including four locations in Tayside and Fife.
These are Perth’s High Street, Overgate Shopping Centre in Dundee, Central Retail Park in Kirkcaldy and Market Street in St Andrews.
It is expected that only 90 of the shops will be retained by the new owner.
This will save around 1,000 out of 1,500 jobs.
PwC is reportedly standing by as administrators-in-waiting for the pre-pack deal.
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.
Earlier this month Paperchase 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.”
The deal is still to be confirmed by Paperchase and Permira Debt Managers.
