As talks with landlords about a restructuring plan continue, The Telegraph reported on February 10 that Paperchase is considering linking rent arrangements with store turnover as part of a CVA that would limit store closures and reduce property costs.
This new plan comes after the retailer’s parent company, Primary Capital, called in KPMG to discuss options, including a CVA. Stationery Matters reported last week that KPMG had been in touch with potential buyers for the stationery brand.
The Telegraph reported that it remains unclear whether Paperchase will opt for a CVA or sale, but this newly tabled restructuring plan is encouraging for the retailer, which will need to make a decision before the end of February in order to give landlords enough warning before its quarterly rent payment is due on March 25.
Company Voluntary Agreements are becoming increasingly popular among retailers keen to slash costs by reducing expensive high-street store estate. Carpetright, New Look and Mothercare are just some of the chains who have opted for CVAs, but the procedure has been criticised across the board for facilitating the ditching of liabilities.
Pre-tax profits at Paperchase fell to £613,000 for the year ending January 2017, due to lower footfall, rising rent and rates bills, and foreign currency exposure. The company has yet to file accounts for the year ending January 2018.