The Paper Source store with its Easter display is shown closed on Boylston Street on April 08, 2020 in Boston, Massachusetts.
Maddie Meyer | Getty Images News | Getty Images
Elliott Investment Management, the owner of Barnes & Noble, said Tuesday it will acquire gift and stationery retailer Paper Source.
The acquisition will provide Paper Source with the funding it needs to emerge from Chapter 11 bankruptcy.
Barnes & Noble CEO James Daunt will oversee both companies. While the two businesses plan to operate independently, it hinted at possible partnerships in the future.
“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,” Daunt said in a press release.
Paper Source plans to operate 130 stores in the U.S. as well as its website and wholesale division, Waste Not Paper by Paper Source.
The stationery chain filed for bankruptcy on March 2 and was forced to close stores, cut jobs and reduce the pay of senior managers. Like many retailers, Paper Source’s sales fell last year due to Covid pandemic shutdowns, capacity restrictions, and a wave of canceled weddings and events hurt sales of invitations.
Paper Source had purchased 30 new stores from its competitor Papyrus just weeks before the pandemic hit in March 2020.
At the time of its bankruptcy filing, Paper Source had 1,700 employees, 158 stores, and $100 million in debt and leases that cost $36 million annually, according to NBC News.