Popular high street shop is ‘lining up administrators’ as bosses race to save the chain
A MAJOR high street retailer is "lining up administrators" as bosses race to save the chain.
Paperchase has said that it is in talks with potential buyers amid reports that it is lining up administrators.
The stationery chain confirmed it has hired advisers from Begbies Traynor Group (BTG) and PwC to to find a deal.
It is understood the company could be bought through a pre-pack administration.
This is an insolvency process for a business to sell its assets before appointing administrations.
Paperchase said it is still considering a solvent sale and has had interest from a number of possible suitors.
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A spokesman for Paperchase said: “We confirm that we have retained BTG and PwC to advise Paperchase on strategic options, including the sale of the business as a going concern to new owners.
“Talks are continuing with a number of interested parties."
The potential sale comes only four months after the retailer changed ownership.
Paperchase has around 100 stores in the UK, but the move does not mean that all branches will close.
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All stores are currently still open and its website is still up and running, and accepting orders as well as gift cards.
But the administrators are allowed to stop accepting gift cards at any point.
In 2020 when the Arcadia Group prepared to appoint administrators, shoppers were urged to spend Topshop, Dorothy Perkins and Miss Selfridge gift cards.
So if you have a Paperchase gift card, you may want to think about spending it soon.
Paperchase previously secured a rescue deal in 2021, which saved around 1,000 jobs and the majority of stores after it fell into administration.
More brands collapsed last year after losing the same battle "many retailers" had been fighting amid the Covid pandemic.
From the Scottish clothing brand M&Co to wellies store Joules, a number of familiar brands went bust in 2022.
Here, The Sun has put together a full list of retailers that closed last year.
Major burger chain Byron Burger also recently fell into administration and is set to close nine restaurants immediately.
Further popular chains including Las Iguanas, Cafe Rouge and Bella Italia also fell victim to the pandemic.
In December 2022, pub chain Wetherspoons announced it would be closing a total of 39 pubs after being hit by soaring inflation.
What does going into administration mean?
When a company enters administration, all control is passed to an appointed administrator - who has to be a licensed insolvency practitioner.
Their goal is to leverage the company's assets and business to repay creditors.
Once the administrator has taken over, a moratorium is placed around the company and stops all legal actions.
After the administrator takes over, there isn't much that can be done to reverse the process.
How does administration work?
The administrator will write to your creditors and Companies House to say they’ve been appointed.
They will try to stop the company being liquidated but if they can't, the administrator will pay as much of a company's debts as possible from the assets.
The administrator has eight weeks to write a statement explaining what they plan to do.
This must be sent to creditors, employees and Companies House and invites them to approve or amend the plans at a meeting.
Gift cards - your rights explained
When a company goes into administration, the people appointed to manage the process can decide whether to allow the use of gift cards or not.
It means you'll need to keep an eye on the administration process to see what your rights are.
The administrators are allowed to stop accepting gift cards at any point.
If the administrators later decide that you can't use your vouchers, you should register a claim with the administrations for the value of the vouchers.
This also applies if the company can't be saved through administration and is later liquidated.
However, you may not get this money back if other creditors are owed money too. You may also only get a portion of the money back.
If the voucher or amount put on a gift card was for more than £100, then it may be possible to claim the money back if it was purchased with a credit card.
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This is because the card company is jointly liable under Section 75 of the Consumer Credit Act 1974.
If the voucher was a gift, then you'd need to ask the person who bought it for you to claim the money back.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]