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Around 1,000 jobs at stationary retailer Paperchase – about two-thirds of its workforce – have been saved after a ‘substantial’ part of the business was sold before it went into administration.
The company had filed a noticed to appoint administrators earlier this month while the management team assessed their options for enabling the business to continue trading.
It was sold to a newly-incorporated company, Aspen Phoenix NewCo, in a pre-pack administration earlier this week.
The organisation will operate in a “smaller and more streamlined manner”, with a smaller and “more relevant” footprint on UK high streets.
Around 500 jobs are set to be lost as it refocuses its business.
CEO Olly Raeburn said: “The cumulative impact of lockdowns and related restrictions means that it is imperative we make this tough but necessary decision to safeguard Paperchase’s future.
“In taking this action, we are giving ourselves the best opportunity to ensure that the business is fit for purpose in this new retail environment. We have been in close dialogue with all of our stakeholders through this process and are grateful for their continued support.
“We, of course, recognise that this affects many of our colleagues and we will do all we can to assist them during this difficult time.”
Elsewhere in the retail sector, around 13,000 Arcadia Group employees are awaiting the outcome of talks to buy its brands out of administration.
Boohoo is in “exclusive” talks to buy Dorothy Perkins, Wallis and Burton; while rival online fashion retailer Asos is expected to buy Topshop, Topman, Miss Selfridge and HIIT.
Earlier this week Boohoo announced its purchase of the Debenhams brand and website for £55m. However, the deal did not include any of the retailer’s remaining 118 high street stores or its workforce, resulting in up to 12,000 job losses.
Meanwhile, another 519 jobs could be lost at manufacturing firm GKN, which is planning to close its Birmingham factory.
The car parts firm said it had tried to cut site operating costs, but competition from abroad had made the factory unviable.
Unite national officer Des Quinn said: “The workforce have been left shocked and angry to learn that management is looking to close this highly viable site.
“Unite is now seeking urgent meetings with senior management at GKN to understand the business case and the logic behind this decision.”