The industry is reeling from the shock that Paperchase has called in KPMG to explore a potential CVA (Creditors Voluntary Arrangement) as one of the options for the business.
Timothy Melgund, deputy chairman of Paperchase told PG Buzz: “This is not an enjoyable time, but there is an inevitability given what is happening in the UK retail scene with the general drop in footfall. Our ecommerce and internationally based businesses continue to perform strongly but , as many will know, UK retail is severely challenged at present for a whole host of reasons.”
He stressed that the retailer’s financial plight was not in any way a reflection of the nation falling out of love with greeting cards. “Far from it. Greeting cards are continuing to sell fantastically well with sales consistently outperforming footfall.”
Timothy gave assurances that Paperchase would “continue to pay suppliers to terms” and that they should continue to supply.
While the drop in general high street footfall is being cited as the main reason for the retailer’s situation, Timothy said that “the death of the high street is greatly exaggerated, there are many markets where footfall is holding up well, most notably where we have shops in railway stations.”
It was The Telegraph who broke the news of KPMG’s appointment (in its January 16 edition and online platform) to come in and explore options for the retailer, claiming that the accountancy firm was to draw up a store closure plan.
Timothy told PG Buzz that at this stage he had “no idea if any or how many shops would be closed.”
Paperchase currently trades from 145 UK stores as well as 30 from overseas.
The Telegraph and other media picking up on the story highlighted how Paperchase’s latest accounts, that were filed at Companies House late last year, showed that the retailer had reported a pre-tax loss of £6.3 million for its year ending 3 February 2018.
Above: Paperchase has appointed KPMG to explore various options, of which a CVA is one.