The national press has made much of the fact that one of Paperchase’s credit insurers, Euler Hermes, has withdrawn insurance for any new stock that suppliers deliver to the high-street retailer. However, Paperchase retains cover for all its existing agreements with suppliers.
To put the move into context, it is understood that although more than 500 Paperchase suppliers use credit insurance, the majority do not. But is the withdrawal of cover a sign of wider financial malaise for Paperchase?
The company categorically denied this, responding with defiance in an interview at the weekend with The Sunday Telegraph: “We are disappointed Euler Hermes has reduced credit insurance. We don’t think it is fair and we think they should reverse it. There is no cash issue. We have been around for 50 years and plan to be for another 50.”
Paperchase went on to tell The Times: “We’re in discussion with [Euler Hermes] around why we believe this decision should be reversed. Paperchase has excellent long-term relationships with suppliers and very supportive lenders and owners. Trading so far this year is in line with expectations.”
According to the most recent accounts filed at Companies House, for the year ending 28 January 2017, Paperchase declared its pre-tax profit amounted to £613,000, a drop of 88% on the previous year. The next annual accounts, made up to 28 January 2018, are due to be filed by 28 October. The next confirmation statement is due 9 December.