Barnes & Noble Owner Will Buy Bankrupt Paper Source
The owner of Barnes & Noble, Elliot Investment Management, announced it will acquire stationery retailer Paper Source, CNBC reported. The acquisition will give Paper Source the finances it needs to come out of its Chapter 11 bankruptcy. According to CNBC, Barnes & Noble CEO James Daunt will oversee both companies. The two businesses may partner in the future, but for now will continue to operate independently. Paper Source plans to operate 130 stores in the U.S., along with its website and wholesale division, Waste Not Paper by Paper Source.
Paper Source was forced to close stores, cut jobs and reduce pay for senior managers as a result of filing for bankruptcy on March 2. At the time, the company had 1,700 employees, 158 stores and $100 million in debt. In March 2020, just weeks before the pandemic hit, Paper Source acquired 30 new stores from its competitor, Papyrus.
Total Retail's Take: Like most traditional brick-and-mortar retailers, Paper Source was hit hard by the COVID-19 pandemic. Its sales dropped due to shutdowns and capacity restrictions once its stores did reopen. In addition, the sales of invitations, a staple of the Paper Source business, decreased dramatically since weddings and events were being cancelled to prevent the spread of the coronavirus. Paper Source and Barnes & Noble have an opportunity to complement one another since their businesses are similar in nature, but they aren't direct competitors. While there aren't plans for them to partner right now, it will be interesting to see if they collaborate in the future.
Ashley Chiaradio is the Senior Content Strategist at Total Retail. Ashley has been creating content for more than 7 years, and provides a unique insight in covering the retail industry having worked directly for retailers in the past. She’s passionate about profiling women leadership in the space.