Paper Source will sell itself to Elliott Investment Management, allowing the retailer to emerge from Chapter 11 and pursue a turnaround. The company will emerge with significantly less debt and continue operating 130 stores, its ecommerce site and the Waste Not Paper by Paper Source wholesale division.
Elliott also owns Barnes & Noble, and the firm plans to look for mutually beneficial retail partnerships that leverage complementary aspects of each retailer. Each company will remain independent, but Barnes & Noble CEO James Daunt will oversee the operations of both.
“I look forward to working closely with everyone at Paper Source,” said Daunt in a statement. “This is a wonderful brand, with a unique culture and community. With Paper Source’s management team, we will support and accelerate the brand’s strategic growth initiatives. Alongside this, the opportunities for Paper Source to work with Barnes & Noble are tremendously exciting for both businesses.”
Paper Source filed for Chapter 11 bankruptcy in March 2021 when it was operating 147 stores. The retailer cited lockdowns as the source of its troubles, noting that it had been experiencing “rapid expansion and sustained sales growth” prior to the pandemic. Gross sales fell 32% year-over-year in 2020 to $104 million.