Major retail chain collapses into administration putting 106 stores at risk of disappearing from the high street

PAPERCHASE has collapsed into administration putting more than one hundred stores and jobs at risk.

The stationer announced that despite “best efforts” it received no viable offers of buyers.

Paperchase has collapsed into administrationCredit: Getty

It comes after reports Paperchase was in talks to secure a pre-pack administration deal.

The administrators said there has been interest in buying the Paperchase brand.

But this puts the 106 stores at risk of closure as well as affecting 820 employees.

All stores are currently still open as normal, the administrators confirmed.

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Any shoppers with gift cards are being urged to redeem them as soon as possible as they won’t be accepted after two weeks.

A statement from the joint administrators said: “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.”

This means the business could be sold to a new buyer – but may we may still see the loss of stores and jobs.

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 administrators 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.