The Paper Store, Now Bankrupt, Looks to Line Up Speedy Sale
(Bloomberg) -- The Paper Store LLC, an 86-store specialty gift chain, is the latest retailer seeking a sale in bankruptcy amid the Covid-19 pandemic.
The company, which has stores in seven states across the Northeast of the U.S., filed for Chapter 11 bankruptcy Tuesday after the pandemic hurt sales, according to court papers. Now the retailer needs to find a buyer before the end of August so it can stock up on merchandise prior to the key holiday season.
The Paper Store counts itself among a growing list of retailers pushed into bankruptcy as the pandemic continues to suppress economic activity. High-end cookware chain Sur La Table Inc. filed for court protection from creditors last week, as did Brooks Brothers Group Inc.
“Even though stores have been allowed to recently reopen in most jurisdictions, the disruption and additional cost of trying to preserve the health and safety of nearly 2000 full and part time employees has only made matters worse,” Don Van der Wiel, chief restructuring officer of The Paper Store, said in a court declaration.
A group of investors including a current creditor and members of the The Paper Store’s founding family are preparing a bid for chain, court papers show. The company is proposing a deadline for bids of August 21 and an auction on August 24.
The Paper Store, founded in 1964 by Robert Anderson, started as a newspaper and stationary store in Maynard, Massachusetts. It now counts almost 2,000 full-time employees and has a burgeoning e-commerce platform, according to court papers.
The company doubled its store count in recent years, taking on more debt in the process, according to court papers. The Paper Store now has about $45 million of debt, most of which is held by third-party financial institutions.
The Paper Store, based in Acton, Massachusetts, is owned by its founding family as well as Westview Capital Management, according to court papers.
The case is The Paper Store LLC, 20-40743, U.S. Bankruptcy Court for the District of Massachusetts (Worcester).
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