Paperchase was in the news last month as the story broke that their credit insurer, Euler Hermes, has refused to cover new contracts with suppliers (a similar case to what happened to Poundland and Maplins recently). It’s pretty big news as it means the company is no longer covered if they don’t have the cash flow to pay their suppliers - and the story even made it onto the Radio 4 programme - You & Yours.
Paperchase weren’t ready to go on the programme to talk about it - as it hasn’t changed their relationships with suppliers or payment terms… its just business as usual.
Instead, the feature opened with a few words about the growth in the stationery market. Presenter Peter White explained:
“In a growing digital world, it seems that many of us are still preferring the ‘handwritten touch’, with stationery sales seeing a steady year on year growth of around 1% from 2015, reaching £2.9 billion” according to Mintel.
We then heard a few clips from consumers in Manchester who talked about their love of stationery (from hipster note pads to novel Disney stationery to smelly pencils) - and in the interest of fairness, one chap who explained he didn’t buy stationery (apart from greetings cards).
I was pleased to have then been asked to contribute my take on why a premium brand like Paperchase is struggling, when the market is in fact growing.
Peter asked me whether it’s because our interest in premium brands is waning – and here was my response…
“I don’t think our interest in premium brands is actually waning at all. I suspect what Paperchase is suffering from is increased competition at that top end of the market. They’ve been the leader in stationery for 20 years, particularly fashion-led stationery, and a lot of other suppliers are beginning to realise what a fantastic opportunity that is… so the competition is definitely hotting up for them.”
He then asked: In contrast, companies like Smiggle are doing really well - they’re aimed mainly at children. Is this the market then that’s most interested in stationery?
“You heard from one of your contributors just before I came on air that her daughter loves to go into a retailer and spend a lot of money on pens and notebooks - and Smiggle are absolutely tapping into that demand, but really for the younger teens at the really fashion-led end. Paperchase, I would say, in the main is aiming slightly higher than that, in a slightly more aspirational way…”
When you say ‘aspirational’… we’re always being told, nobody writes letters anymore, is that true?
“I think it’s far from the truth, and actually if you look at the sale of fountain pens and ink over the last couple of years, although it’s coming from a really low base now, actually it’s growing really, really strongly as people are thinking more about keeping in touch - and doing it with materials that they really take a pride in.”
And that’s being reinforced by our listeners actually... so is there evidence that people are still actually doing this?
“Whether they’re writing letters on a sheet of A4 paper with an envelope or whether their writing a message in a blank greetings card, a lot of people are now sending messages to one another. It’s quite interesting that we’re seeing the same trends now as we did back in 2008 when the recession kicked in… as people feel slightly less comfortable about their personal situations, they often keep in touch more and letters or a card are a much nicer way of doing that than an email or a text.”
So perhaps the people who worry that we’re becoming not as literate as we were, are worrying unnecessarily?
“I suspect it appeals to very specific areas of the market and certain demographics, but certainly writing isn’t on the wane for a lot of people, it’s very much in the ascendancy.”
If you’d like to listen again, here’s the entire You and Yours programme (or skip to 29.10 mins for the stationery feature):