Paperchase profits fall amid 'difficult' year

The stationery, gifts and greetings card retailer posted a 16.2% drop in EBITDA excluding exceptional items to £9.1m in the year ending January 2017.

Despite the squeeze on its bottom line, Paperchase said sales grew 4.3% to £119.2m in its core UK business as like-for-likes climbed 0.7%.

Paperchase also hailed growth in its online business, which recorded a 30.7% spike in revenues.

Sales from its overseas operations remained broadly flat, edging up 0.4% over the 12-month period.

Paperchase boss Timothy Melgund said 2016/17 was “a more difficult year” which “undoubtedly became more challenging” following last June’s shock Brexit referendum result.

And he warned that “significant headwinds” have continued into its current financial year.

Despite the turbulent trading environment, Paperchase said it continued to invest in its service proposition, its digital offer and new store openings, launching 16 new shops during the year.

It is also gearing up to open its first two standalone stores in the US next year as it eyes further growth internationally.

Melgund said: “Our investments in digital are bearing fruit and we continue to see strong growth online. Internationally the brand is well placed for further growth, despite a strategic decision last year to withdraw from select concession and wholesale partners.

“We continue to develop relationships with partners across the globe that complement the Paperchase brand and we are excited about our first 2 US standalone stores next year.”

On the outlook since the financial year end, Melgund added: “The UK retail landscape is not for the faint-hearted and there are of course significant headwinds.

“Notwithstanding that, the Paperchase brand and affinity with customers have never been greater and we focus on our new product development and expansion strategy with vigour.”