Credit & Capital

Papyrus Files for Bankruptcy, Closing All 254 Stores

The greeting card and stationery chain is expected close all stores in the next two months.
Lauren MuskettJanuary 24, 2020
Papyrus Files for Bankruptcy, Closing All 254 Stores

Stationery and greeting-card chain Papyrus is closing its stores after its parent company, Schurman Fine Paper, filed for Chapter 11 bankruptcy protection.

“Despite our Herculean efforts to realign our Papyrus and American Greetings stores to fit today’s shopping environment, Schurman Retail Group had to make the difficult decision to close all 254 of our stores in North America,” chief executive officer Dominique Schurman said in a statement.

The entity that filed for bankruptcy, SFP Franchise, controls Papyrus and Paper Destiny, along with the retail chains American Greetings and Carlton Cards. It has about 1,100 employees in the United States.

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In 2009, Schurman sold its wholesale business to American Greetings, which in turn became Schurman’s supplier.

In a court filing, Craig Boucher, the co-chief restructuring officer of SFP, said SFP became “increasingly integrated with and highly dependent on American Greetings” as a result of that 2009 agreement.

On December 5, 2019, American Greetings told SFP it was terminating the supply agreement and would stop supplying product because SFP was in default.

Boucher said that, last fall, SFP was actively engaged with potential strategic partners to sell or recapitalize the business, but they were unable to reach a deal before December 5.

“The company’s rapid expansion, including the re-purchase of franchises, led to a period of over-leverage during the 2008-2009 financial crisis that resulted in financial and operational distress for the company. During that time, the company sought a strategic and/or financial partner to effectuate a restructuring,” Boucher said.

Mackinac Partners began providing advisory services to SFP in November, Boucher said in the filing.

SFP reported revenues of $157.5 million for the 2019 fiscal year and EBITDA of $700,000. It had assets of $39.4 million and liabilities of $54.9 million, according to the court filing.

The store closings are expected to take place in the next four to six weeks.

Justin Sullivan/Getty Images

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