This Popular Gift Store Just Filed for Bankruptcy
Amid falling sales, the chain has decided to close a number of its stores.
After more than 37 years in business, beloved gift store Paper Source filed for Chapter 11 bankruptcy protection on March 2. The brand, which operates 158 stores and an e-commerce arm in the U.S., plans to close at least 11 of its stores, according to court documents obtained by Retail Dive.
According to the Chicago-based company's bankruptcy filing, Paper Source had expanded to 161 retail location after acquiring 27 stores from competitor Papyrus, which announced its own bankruptcy filing and began the process of closing its retail locations in Feb. 2020.
Paper Source's decision to file for bankruptcy was undeniably linked to losses suffered as the result of the pandemic, the brand announced, with sales in 2020 coming in at $104 million, down from $153.2 million the year prior. "As with many other retail brands, [Paper Source has] sustained deep damage to their finances and operations as a result of the ongoing COVID-19 pandemic," said Paper Source CFO Ronald Kruczynski in the chain's bankruptcy filing, calling the decision an essential part of the brand's "comprehensive restructuring."
Paper Source isn't the only chain that's suffered serious financial fallout amid the pandemic, however; read on to find out which other beloved stores may not be long for this world. And for more stores shutting down, check out This Beloved Chain Is Closing All Its Stores.
On Feb. 18, sunglasses chain Solstice announced that it would be filing for Chapter 11 bankruptcy protection after sales dropped more than 50 percent between 2019 and 2020. At this point, there have been no announcements regarding Solstice stores closing.
In a statement, Solstice CEO Mikey Rosenberg said, "We are optimistic about reorganization as we continue to see increasing business in our stores as COVID restrictions are lifted and in the new fashions that our vendors are providing." And for the latest store closure news delivered straight to your inbox, sign up for our daily newsletter.
Beloved beauty brand Becca announced on Feb. 22 that the company would cease operations by Sept. 2021. "The global pandemic has had an impact on everyone around the world on many levels. It has also had a tremendous impact on so many businesses. At BECCA, an accumulation of challenges, together with the global impact of COVID-19, has sadly been more than our business can withstand," the company said in a statement. And for more brands suffering the financial ramifications of the pandemic, This Legendary Fashion Brand Is Starting to Shut Down Stores.
On Feb. 24, L Brands, the parent company of mall staple Victoria's Secret, announced that it would be shuttering up to 50 of the lingerie brand's stores before the end of 2021. Victoria's Secret had already seen its footprint diminish over the course of the pandemic; in May 2020, CNN reported that at least 250 Victoria's Secret stores would be closing their doors for good.
Even Belk, a department store that's been operating continuously for 133 years, couldn't withstand the financial problems the pandemic brought upon it. On Feb. 23, Belk announced its filing for Chapter 11 bankruptcy protection as a means of offloading $450 million in company debt. "The COVID-19 pandemic directly resulted in drastic declines in sales, revenue, and liquidity," explained Belk CFO William Langley in court documents, according to The Charlotte Observer.
The next day, Belk emerged from bankruptcy with a new restructuring agreement. "The infusion of cash and reduction in debt provides Belk with increased liquidity to focus on its key initiatives for growth, including further enhancements to its omnichannel capabilities and the expansion of merchandise offerings into new, relevant product categories," the company said in a statement, noting the home, wellness, and outdoor spaces in particular. And for more shops that aren't long for this world, This Iconic Store Is Closing All Its U.S. Locations.