Tesco buys Paperchase brand from administration but not the stores

Tesco has bought the Paperchase brand and intellectual property from administration, but not the stores, putting about 1,000 jobs at risk.

The struggling stationery chain collapsed on Tuesday morning after it failed to find a buyer for the whole business. It has since announced that 75 staff at its London head office have been made redundant.

The supermarket group’s surprise acquisition for an undisclosed amount casts doubt over Paperchase’s presence on UK high streets and the future of 918 employees, although its 106 stores will continue trading for now.

“Despite a comprehensive sales process, no viable offers were received for the company, or its business and assets,” administrators at Begbies Traynor said.

Jan Marchant, managing director of home and clothing at Tesco, said Paperchase was a “well-loved brand by so many” and “we’re proud to bring it to stores across the UK”.

Separately, Tesco said it was shaking up its management structure across its larger stores and closing all remaining food counters, putting more than 2,000 jobs at risk.

The grocer will cut 1,750 team manager roles in a bid to run its supermarkets more efficiently after similar changes were implemented at Tesco’s smaller stores.

It is also shutting eight pharmacies, changing some night shifts and reducing hours within some post offices, affecting a further 350 jobs.

“These are difficult decisions to make, but they are necessary to ensure we remain focused on delivering value for our customers wherever we can,” chief executive for UK and Ireland Jason Tarry said.

Tesco’s remaining counters and hot delis will also disappear from next month, with the supermarket blaming the decision on a lack of demand.

“Our customers no longer say they are a significant reason for them to come in store and shop with us,” the group said.

Supermarkets are having to cut costs as they seek to keep food prices down and retain customers amid the cost of living crisis.

Chief executive Ken Murphy previously said the retailer was gaining shoppers as people switched between chains, adding he was “cautiously optimistic” for the year ahead.

The grocer is creating 1,800 shift leader positions, adding that workers affected by job cuts could apply for them or opt for redundancy.

Tesco is the UK’s largest supermarket, claiming 27.5 per cent of the market, according to retail analytics company Kantar. Earlier this month, the group said it still expected to make a retail operating profit of between £2.4bn and £2.6bn for the year, thanks to a strong Christmas.

Last week, the UK’s third-largest grocery chain, Asda, also announced a shake-up of management positions, putting almost 300 jobs at risk and reducing pay for a further 4,000 employees.


Business Asia
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