Paperchase is to survive with a slimmed-down presence on the high street under a rescue deal announced by the company that will save approximately 1,000 jobs.
Sky News reported earlier this week how the stationary chain was to be sold through a so-called pre-pack administration to Aspen Phoenix - a newly formed company backed by private equity firm Permira Debt Managers.
The deal will see up to 90 of the chain's 125 stores retained by the new owner in a departure from other deals this week that will see Debenhams trade online-only under Boohoo's ownership.
ASOS, another online retailer, is in exclusive talks to buy TopShop from the collapsed Arcadia Group empire.
But any deal is expected to exclude the 444 stores at a time when the high street is largely shuttered because of COVID-19 restrictions, which have varied in severity since last March.
Up to 250 jobs were to be lost at Paperchase.
Its chief executive, Olly Raeburn, said of its rescue: "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."
The closure of its shops in November and December wiped out the most crucial months of the year for the chain.
Paperchase has been owned by Primary Capital, a private equity firm, since 2010, but has been forced to contend with tough high street conditions for years.
In 2019, it launched a company voluntary arrangement which saw it linking rent payments to store turnovers - making it one of the first retailers to do so.
