Paper Source, a Chicago-based greeting card-gift retailer that quickly expanded to the COVID-19 epidemic, went bankrupt on Tuesday.
It is the latest retailer to seek bankruptcy protection during an epidemic that has closed brick-and-mortar stores for months. The company has filed a lawsuit in Virginia’s Eastern District 11 with the U.S. Bankruptcy Court, which means it will continue to operate by restructuring the debt.
All but 11 of the stores that were closed during the epidemic are expected to remain open. Retail stores in Seattle have stores in the Pacific Place Mall in downtown Seattle, Queen Anne, University Village and Bellevue Square.
The company, which opened as a store in Chicago in 1983, grew last spring to more than 160 stores, buying 27 leases from its bankrupt rival Papyrus. CEO Winnie Park said at the time that the company had never closed a single store. Weeks later, during the epidemic, everyone had to shut down.
At the time of Ores, stores accounted for about 83% of the company’s sales, although online sales were growing, expanding stores closed, capacity constraints, and the loss of the wedding business meant that sales would fall by 32% by 2020, according to the bankruptcy court.
Although some landlords agreed to cut the company’s rent, the deal was due to expire in late 2020. The retailer, who owed a considerable amount of money, had “no choice but to seek bankruptcy protection.” Submission:
Paper Source, which has about 1,700 employees, said MidCap Financial agreed to serve as a preliminary bidder or “chase horse” to buy the company’s assets. The deal includes $ 16.5 million in financing to help the company stay afloat. Sales are expected to close in about 90 days.
“The Covid-19 epidemic posed real challenges to our in-store business, but this sale will help us grow stronger,” Park said in a statement.
Breaking National business contributors contributed to this report.