Tesco has agreed to buy the Paperchase brand after it collapsed into administration, but not its shops or workforce.
The high street stationary hired administrators on Tuesday morning (31 January) after the struggling business was unable to secure a rescue sale.
Tesco later announced a deal to buy the brand and intellectual property from the insolvency specialists, but the move means Paperchase’s stores are expected to close.
Paperchase employs around 820 staff across 106 stores, meaning hundreds of shop workers likely to face redundancy. Paperchase is yet to confirm how many jobs will be lost.
Begbies Traynor, which was appointed administrator of the stationery retailer, said it would continue to monitor trading in stores and provide further updates in “due course”. It came after the ailing firm failed to secure a buyer after being placed on the market by retail veteran owner Steve Curtis.
The administrators said: “On January 31, Mark Fry, Kirstie Provan and Gary Shankland, of Begbies Traynor, were appointed as joint administrators of Aspen Phoenix Newco Limited, which trades as Paperchase.
“Unfortunately, despite a comprehensive sales process, no viable offers were received for the company, or its business and assets, on a going concern basis. However, there has been significant interest in the Paperchase brand and attendant intellectual property.
“The joint administrators will continue trading the company’s operations in the short term, with all stores remaining open and trading as normal.”
All 106 stores will remain open and trading as normal in the “short term”, the company added. Paperchase said it would “strongly urge” customers to redeem gift cards as soon as possible as they will not be accepted after two weeks.
Paperchase also fell into administration two years ago, with the closure of 37 stores.
Jan Marchant, managing director of home and clothing at Tesco, said: “Paperchase is a well-loved brand by so many and we’re proud to bring it to Tesco stores across the UK.
“We have been building out plans to bring more brands and inspiration to the ranges we currently offer and this will help us to take those plans further. We look forward to sharing more with our customers in due course.”