In its Chapter 11 bankruptcy filing on July 14, Paper Store LLC, known to consumers as The Paper Store, declared that “the sudden economic impact of the global COVID-19 pandemic derailed” the 86-store stationery and gift chain’s “optimistic prospects for the future.”
Despite the pandemic-related store closings, The Paper Store, which operates in seven Northeastern states, has seen its online sales skyrocket. Although the company expects total revenues this year to fall to $133 million from $167 million in 2019, its e-Commerce sales are projected to more than triple, from $5.9 million last year to $18.8 million this year.
The company is hoping “a smooth transition into Chapter 11” will allow it to maintain operations and employ approximately 2,000 full- and part-time employees. Members of the Paper Store’s founding family and a group of investors are preparing a bid to buy the company and are requesting a speedy exit from bankruptcy. The company is proposing a deadline of August 21 for competing bids and an auction date of August 24, according to Bloomberg.
The Paper Store, which is owned by the family of founder Robert Anderson and WestView Capital Partners, has debt of approximately $45 million. The company took on debt to support a recent growth spurt that doubled the chain’s store count.
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