Breaking News from the Stationery World: Paper Source Files Bankruptcy

I was all ready to turn off my laptop and take a much-needed 7-day siesta when an extremely urgent bit of news crossed my desk. So here goes…

Paper Source, the Chicago-based stationery shop goliath, has faced its fair share of challenges during the pandemic. Paper Source closed 11 stores in the past year.

However, many small stationery makers (card creators, printers, designers) have recently received unprecedented orders from Paper Source in the last three months. Some makers were surprised by the large orders but, in the wake of slow sales in 2020 due to the pandemic, they were inclined to believe that the large orders were a sign that the economy was improving so they rushed to fill the orders. Many of those orders came with requests to urgently ship product to the Forest Park, IL distribution facility as recently as two weeks ago.

Then, Paper Source filed for Chapter 11 bankruptcy. Sitting in their warehouse is all this newly acquired inventory and what most expect is absolutely no intention of making good on the outstanding invoices.

A search on Instagram or Facebook for mention of “Paper Source bankruptcy” and dozens of small makers and manufacturers can be found commiserating and regaling the sleazy way that Paper Source has chosen to essentially rip-off these small, struggling businesses in order to fund their bankruptcy. We found references to outstanding invoices from several small stationery creators to the tune of $10-20K each that Paper Source owes them. For a business like ours (Well-Appointed Desk or Skylab) this would mean we would have produced 1000s of units which would have cost us in time, materials, labor costs and more. I am sure it is the same for all the other card makers and stationery product creators who fulfilled orders for Paper Source with their “net 60” payment schedule only to realize now that the money will never come. If I were out $10K in merchandise to a wholesaler, I would be close to financial ruin. (We have not sold any product to Paper Source but if we did, this would suck big time! And it has for many of our friends.)

All of these underhanded dealings look like they were clearly set-up to cook the books for an impending equity buyout in the next 90 days that is supposed to create a  “more productive store base and more liquidity to support the brand’s omnichannel growth strategy.” Omnichannel? FU, Paper Source, you money grubbing shits.

Why am I telling you about this?

  1.  To convince you to no longer spend even a cent at Paper Source. Ever again. Makers are very unlikely to see even a penny or cents-on-the-dollar for the outstanding invoices so as much as our instinct is to buy goods from Paper Source so they make good on their debts, it’s unlikely that they will actually pass any profits on to the makers.
  2. To encourage you to support small, local stationery shops (like CW Pencil Enterprise, Wonder Fair, Baum Kuchen, Little Otsu, Yoseka Stationery, Omoi Zakka, Greer Chicago, etc, etc.) and small online shops (see sidebar for some of our favorites).
  3. If you found something you genuinely loved at Paper Source, continue to support those makers by buying direct from their Etsy or online shops.
  4. Write an email or letter (Paper Source 125 South Clark St. Chicago, IL 60603) telling them what you think of their business practices. Tell them if they can’t pay their bills they should return the merchandise to the makers. “Liquidating assets” you never paid for is stealing.
  5. Pass the links in this post on to others so that no one will unknowingly spend money with Paper Source.

I realize that stationery and paper goods are not the most important thing in the world but for many (myself included) this is their livelihood. So many small businesses have been adversely affected by the pandemic, many owned and operated by women, POC and minorities, and stationery makers are no different. Large corporations continue to thrive or find ways to “beat the system” which only widens the gap. The only weapon we have available to us is our wallets. Use it wisely.

For more information,  check out the posts below that provide more nuanced coverage and not an opinionated rant.

(Side note: Apologies for the plethora of Instagram links. I wanted to connect my lovely readers directly with some of the posts from makers who were directly affected by Paper Source and be sure that the posts were properly linked and credited. If they show up as empty boxes, I apologize. Instagram does not always show images from people if you are not already following them.)

Written by

22 comments / Add your comment below

  1. Excellent writing about a cause that is too often happening to the “little people” who are trying to scratch out a living. The scum will profit from the sale and the new larger buyer will liquidate and profit. Another wonderful example of “big business” America.

  2. Email sent! How sleazy of Paper Source to call out that big order. It likely gave hope that will not be fulfilled of a pay day.

    I pointed out to them that though they might come through bankruptcy, the smaller companies would not be able to hold on to be creditors in the bankruptcy court proceedings. Shameful.

    Now to unsubscribe from their emails. I’ve never bought from them, and now never will.

    1. Soooooo…..you never shopped at Paper Source….but you subscribed to their emails…which means you never bought any products made by these small businesses you’re so offended for…don’t you think if you, and more people, did shop there the last year that that would have avoided this whole situation?….instead you take the time to berate and send angry emails to a place youve self-confessed never did business at or with.

      1. We are not condemning Paper Source for needing to file bankruptcy and I would, in no way, suggest to boycott a business just because they filed bankruptcy. I was a fan of paper source for years. What the issue is here is that paper source ordered two and three times the inventory they normally order right before they filed for bankruptcy. In soon so, they can write off the inventory and not pay the outstanding invoices. In doing so, they are essentially taking down the “little guys” with them in this financial ruin.

        Paper Source is owned by an equity firm that is in the process of selling to another firm so they will not be destroyed by this financial choice. Small family businesses could be ruined as a result of the $10k, $20k etc outstanding invoices from Paper Source.

        Does that sound reasonable to be upset about it now?

  3. This is heinous. As it happens, I have never bought from Paper Source and will make certain I never do. I do support several of your sponsors, though JetPens is my most frequent source. Also Goulet, which is not a sponsor of Well-Appointed Desk but is family-owned.

  4. I can’t think of a worse time to treat people in such an appalling manner. This pandemic year has seen so much struggle and pain for so many and for this company to pull an underhanded stunt like this…karma needs to visit them soon.

  5. Had a bussiness in Ct. and Webster Bank pulled the same thing. They were using a outside source for print procurement placed a large order then the print procurement CO filed for bankruptcy. I was told they new the bankruptcy was coming before they placed the order.

  6. Thank you for this information. I’m heartbroken. I’ve been a big fan and customer of Paper Source for years. I love their note cards for decorating and writing personal notes. Craft supplies for decorating, not my only source by any means. They have a decent card selection, many of which are from small artists that I’m sure are getting burned in this process. I make the DIY craft decorating kits to decorate my MIL’s healthcare room in her retirement center.

    I will write them with my disappointment and to inform them of the end of our relationship. It’s a shame Biden’s Covid Stimulus plan didn’t come through sooner. It might have saved them, and many other businesses.

    I am so tired of this pandemic and the toll it is taking on all of us. Again, thank you for your post.

  7. I’d really like to write their bankruptcy judge to advocate for return of the goods. I’ll try finding the info online, but if anyone knows the docket, court, and judge, please post it up.

  8. I work for Paper Source. Your info is wrong. We were notified in an internal call that ALL vendors will/would be paid. There’s a lot of misinformation and misunderstanding out there right now about this process and what this actually means. Also please remember the people In the stores are not responsible for these decisions or processes…they are the most accessible but please realize just as much as these orders are your livelihood, so is their livelihoods in their position as stores associates. If you stop spending at Paper Source you’re not accomplishing anything except more orders not getting paid and people – good people – losing their jobs. Be frustrated. But continue to be kind.

    1. I’m happy to hear that Paper Source plans to make good on their debts and I understand that your livelihood as an employee is at risk should paper source lose more business.

      I did not suggest that anyone harass or berate staff in stores about the bankruptcy and would never suggest that.

      I will look forward to hearing if Paper Source makes good on its promises. If they do, I will be happy to publish an article that Paper Source made good on its debts. Until then, I will continue to monitor the proceedings.

  9. I emailed Paper Source customer service and received a link to the filing: https://dm.epiq11.com/case/papersource/info
    Customer service wanted to “assure” me “There is no foreseeable impact to the product, experiences and services provided to our customers as a result of the filing. Operations will continue as normal.”
    They have not a care about anything but sales and profits, as a corporation. Absolutely buy from the small makers. Writing to the Judge under the docket number, in support of a small maker, might make an impact.

  10. It should go without saying, but everyone with an unpaid invoice, no matter how small, needs to file their clam with the bankruptcy court “yesterday if not sooner,” as my 3rd grade teacher used to say.

  11. This reporting leaves out a lot concerning bankruptcy laws, the ability of some of these vendors to research the company’s balance sheet, etc.

    Sounds more like a disgruntled vendor than a financially astute reporter.

    1. I never claimed to be an astute financial reporter. I’m a stationery product reviewer and a small business owner. If you want more astute coverage, I recommend reading the articles linked at the bottom of the post.

  12. I’m reeling a bit from all of this, because I have always been a big fan of Paper Source’s paper bar as there aren’t that many places I can get a good cardstock in lots of colors and sizes (with mix-and-match envelopes, essentially) in small quantities, and that I can easily go see in person (because color matching online is hard). It was helpful that their cardstock stood up reasonably well to fountain pen ink, too.

    Does anyone know of a good alternative to PS’s paper bar with a reasonable array of colors/sizes that you don’t need to bulk order from?

    1. I’ve purchased from Cards and Pockets (https://www.cardsandpockets.com/) with success. They have a large variety of sizes and colors and I think the minimum is 10 envelopes/color (unless it’s like a fancy laser cut one) but they don’t have a minimum order for shipping. Envelope paper is decently FP-friendly though I have had some light feathering on occasion.

      Er, I realize now that I don’t have any experience with their actual cardstock, just envelopes. But it looks like similar pricing scale.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: