Paperchase has secured a rescue deal which will preserve around 1,000 jobs and the majority of stores after tumbling into administration.

However, the high street card retailer said 37 of its 127 stores will shut their doors permanently despite the move.

Administrators revealed that newly formed company Aspen Phoenix Newco, which is backed by Permira Debt Managers, is to take control of the retailer.

Paperchase hired administrators from PwC after it saw sales slide on the back of significantly lower footfall amid coronavirus restrictions.

In taking this action, we are giving ourselves the best opportunity to ensure that the business is fit for purpose in this new retail environment

The group said the rescue deal will retain its position in the UK retail landscape, “albeit in a smaller and more streamlined manner”.

Its new owners said that a “comprehensive transformation programme” is currently under way to help it rebound once restrictions lift.

Olly Raeburn, chief executive at Paperchase, said: “The cumulative impact of lockdowns and related restrictions means that it is imperative we make this tough but necessary decision to safeguard Paperchase’s future.

“In taking this action, we are giving ourselves the best opportunity to ensure that the business is fit for purpose in this new retail environment.

“We have been in close dialogue with all of our stakeholders through this process and are grateful for their continued support.

“We, of course, recognise that this affects many of our colleagues and we will do all we can to assist them during this difficult time.”