Stationery store Paperchase is on the brink of collapsing into administration after sales were hit by closures due to the UK’s Covid-19 restrictions at the end of last year.
Arcadia Group, which owns Burton, Topshop and Dorothy Perkins, has already gone into administration, putting jobs at risk.
Paperchase, which has 127 stores and 1,500 employees across the UK, including a shop in the Pollet, confirmed it has filed a notice to appoint administrators from PwC to advise on its insolvency process.
It launched a company voluntary arrangement restructuring in March in an attempt to turn around its fortunes, but saw this impacted heavily by the pandemic.
It is understood the retailer’s decision to move towards administration was particularly driven by poor sales in November and December amid lockdown measures and tiered restrictions in the UK.
November and December trading normally account for 40% of its annual sales.
Online sales had not been enough to mitigate the overall impact of temporary closures.
The announcement came a day after the Prime Minister Boris Johnson announced the third English lockdown, forcing non-essential retailers to shut again.
A Paperchase group 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.
‘Paperchase is not immune despite our strong online trading.
‘Out of lockdown we’ve traded well, but as the country faces further restrictions for some months to come, we have to find a sustainable future for Paperchase.
‘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.’
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