Paper Source Files for Bankruptcy, Frustrating Cardmakers

“Hell is no fury like a stationer.”

She was an Instagram opening salvo Post Last week, a letter design and print shop in Pittsburgh from Lisa Krawiस्कीski, founder of Sapling Press. Ms. Korinsky was republishing after the paper source, the stationery chain with 158 stores, suddenly filed for bankruptcy on March 2. Her five-man business completed large orders from the chain in January and February, and more than $ 20,000 was owed for such items as Father’s Day cards and tea towels.

The post attracted a bunch of comments from other frustrated cardmakers – a niche industry dominated by women entrepreneurs – who were also concerned about whether they would get paid. The paper source sent an email to sellers the day after it filed for bankruptcy, stating that they would be paid in full for goods provided on or after March 2, and claims to reclaim the remainder to document.

“As a community, we feel that we have been taken advantage of in a way that no small business should have, especially coming from an epidemic,” said Ms. Croinski, 46, who spent nine years Sold goods to paper source. “It hurt extra hard.”

Paper Source, established in 1983, is the latest national retailer to file for Chapter 11 Bankruptcy Security during an epidemic, a process that occurs from companies Jc penny To J crew Used to keep their brands alive while getting out of shop leases and cutting debt.

The difference with the paper source is that vendors say the company placed important new orders for cards and gifts to be filed, even to speed up delivery. Now, it is unclear how much the vendors will pay. Vendors are largely creative women who run small businesses on their own or with a handful of employees.

Jenny Valencia, a 30-year-old owner of the Cardio Bureau, said, “Women have already been so easily hurt by this type of epidemic that we are like men in terms of the types of jobs and care for families.” Va., Which owes $ 15,000 from Paper Source. “She did this with a group of women-owned companies during the month of Women’s History and just before International Women’s Day.” (Paper Source is currently selling products celebrating those events.)

Paper Source is now dealing with an unusually public decline with its vendors in the business of fast and efficient communications, as it is intended to operate. The paper source’s chief executive, Winnie Park, said in an interview, the company based in Chicago made the January and February orders “with a process in place at the time we actually avoid Chapter 11 and potentially an investor business.” Come in. ” . “Unfortunately, those options did not materialize.”

Ms Park said she was concerned about online “misinformation” about bankruptcy, and the company planned to create a webinar to help more than 1,200 vendors understand how to file claims. It said it hoped that suppliers, of which there are about 250 cardmakers, would receive “normal or almost full payment” through special financing for “significant vendors” and a court ruled that suppliers to whom goods would be filed Received 20 days ago.

“We never intended to hurt women and women entrepreneurs,” said Ms. Park, 49. “We have gone through an epidemic that was longer and deeper than any of us, and we have a path we want to engage these women entrepreneurs.”

Nevertheless, the three vendors shared emails from paper sources, in which the company offered them payments from significant vendor funds that ranged between 10 percent and 30 percent, owed to them. In exchange for the money, the paper source said it needed to confirm that vendors would continue to provide the goods to the chain, which were shared on condition of anonymity, as they were confidential, according to the email.

The biggest sticking points with vendors are January and February orders. They question whether the paper source knew that it was making purchases that it could not pay for it – at least not on time. The paper source usually pays 30 to 60 days after receiving the goods. According to court documents, the company began preparing for a Chapter 11 filing in early February after failing to obtain a capital infusion or interest from 138 potential buyers last year.

Alex Gagan Glover, founder and CEO of Cheese Gagne, a seller of cards and drinkware in Los Angeles, said the paper source, along with its four-man company, has made big new plans for letter-printed cards for anniversaries in December, January and February Placed the order (“It’s awesome to work this life with you”) and friends (“You’re my soul sister”) and pushed her to deliver by the end of February. He thought the orders showed a glimpse of hope after the epidemic sale. He said the chain now owes him more than $ 20,000.

“It’s really just shady so they can place multiple orders with so many small businesses before the bankruptcy filing,” said 33-year-old Ms. Gagan Glover.

Ms. Valencia He said that what he owed came from orders this year. Sapling Press said it received its largest order in months from Paper Source in early February. Steel Petal Press, a Chicago stationery and gift shop, said it was awaiting five outstanding payments from a paper source, including three orders made before bankruptcy, asking it to hurry up.

“There was no reason to run through the $ 7,000 Father’s Day order – those cards were not going to go on the shelf in mid-February,” said Ms. Krasinski of Sapling Press.

Ms Park said the orders were not linked to the company’s bankruptcy. The paper source has been trying to revive its inventory for months, she said, particularly because it had to stock about 27 new locations, just before the epidemic through bankruptcy of its former rival Papyrus Had achieved. “We’ve been trying to get our list of greeting cards in a healthy state since last October when it was very clear that we were really short in stock,” she said.

But the move increased the confusion of vendors. Katie Hunt, a business coach, said, “The fact that January came and brands started getting these big orders, they were happy and excited. Vendors through her company, evidence for the product.” The optics are poor. “

Paper Source, a privately held retailer for years, is a relatively small retailer, but a behemoth among stationery-makers, a friendly industry with regular trade shows and even a “paper camp” Where cardmakers are keen to network and learn how to get their goods to workshops and other chains, such as Nordstrom. Due to its size, the paper source is capable of commanding concessions such as long payment deadlines. According to an email reviewed by The New York Times, sellers have been urged for up to $ 250 of credit to help build new stores.

The paper source has about 1,700 employees, most of which are hourly, and it posted gross sales of $ 104 million last year, down from $ 153 million in 2019, according to court documents.

Like many retailers, paper source sales plummeted last year, as it was filled with closures, capacity restrictions and a “wave of canceled weddings”. It closed shops, eliminated jobs and cut the salaries of senior managers. The company estimated that 30 percent of its former loyal shoppers have not visited a store or purchased from its website since the epidemic began.

Court documents show that it is more than $ 100 million in debts and leases that cost $ 36 million annually. Investcorp’s majority company obtained short-term financing as part of its plans to file and sell itself to loan By the end of May. The paper source declined to comment on the specific costs associated with its debt.

Several vendors stated that they understand that the paper source was challenged by the epidemic. But while the paper source may be restructured, there is no guarantee of when and how much will be paid to its suppliers.

“I don’t think anyone’s mad at the paper source for filing for bankruptcy,” said Kyle Durry, who owns the Power and Light Press in Silver City, N.M., and owes about $ 8,000 from the paper source is. “Where I think it’s really killing us a lot, just feeling like we’re taking advantage of it, and we have no rights or recourse because of how small we are.”

While some vendors said they would no longer work with the paper source, Ms. Park said she was optimistic that relationships would improve with more education.

“Bankruptcy is a well-worn path for professionals who engage in it and do it every day,” she said. “For a community like Paper Source that was never through it, or our creators who had never been through it, it is misleading.”

Gillian Friedman Contributed to reporting.

Contact Sapna Maheshwari at sapna@nytimes.com


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