A MAJOR high street chain was bought by Tesco today – but its stores are still at risk of closure.
It comes as Paperchase collapsed into administration this morning.
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Its administrators initially announced that despite “best efforts” it received no viable offers from buyers.
A few hours later, Tesco confirmed it had bought the brand.
This means Paperchase’s products will likely appear in the supermarket’s store in future.
However, the deal puts the stationary chain’s 106 stores at risk of closure as well as affects around 820 employees.
This afternoon, the administrators confirmed 75 staff at the company’s head office in London had been made redundant.
It came after reports that Paperchase was in talks to secure a pre-pack administration deal.
All stores are currently still open as normal.
However, shoppers with gift cards are being urged to redeem them as soon as possible as they won’t be accepted after two weeks.
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A “pre-pack administration” is an insolvency process for a business to sell its assets before appointing administrations.
It’s a way of selling a business to a third-party buyer.
Paperchase previously fell into administration two years ago, with the closure of 37 stores.
At the time, the chain had 1,500 employees.
Paperchase confirmed it was in talks with potential buyers earlier this month.
A statement from the joint administrators today 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 sale reflects the interest in the well-known and established brand and will enable the brand to continue in Tesco stores across the UK.”
You can see the full list of Paperchase stores in our guide.
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.
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.
Battle for the high street
More brands collapsed last year after losing the same battle plenty of 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.
