The last time Paperchase ran into problems and was sold on, some publishers never got paid. Ah, that was in the dim and distant past, wasn’t it? No, it was last August. And now it is happening again. Except this time the buyer is Tesco and they are buying the brand but not the shops.
According to The Times newspaper, 75 employees at Paperchase’s head office in London have been made redundant. Meanwhile the shops will remain open. I wonder how long for?
If I was a publisher to whom Paperchase owed money, I might go in and take my stock back.
So what will happen to those Paperchase shops in the longer term? Maybe Oliver Bones will take a couple of them; they have a not too dissimilar line and ambiance.
By the by, a few days ago I told my oldest daughter about Paperchase’s difficulties and she said no one in their right mind would buy from Paperchase except in an emergency because they were so expensive.
I agree about price – not so much with cards, but with pads and notebooks.
The Times article quotes Stephen Springham, head of retail research at Knight Frank, who said the latest collapse was “not altogether a surprise, given its company voluntary arrangement history and its pass-the-parcel history of private equity ownership”.
He also said that there should be considerable interest in the brand because it is a strong, differentiated brand in a retail sub-sector that enjoys high gross margins and fast stock-turn.
Obviously the stock-turn was not fast enough. And how high was their high gross margin? Is it another way of saying they were very expensive?