The supermarket buys the Paperchase brand but not its shops, leaving the future of 820 staff in doubt.
High Street stationery chain Paperchase has fallen into administration after failing to strike a rescue deal for the business.
It said its shops would continue running in the “short term”, with all stores remaining open and trading as normal.
The chain, which is 50 years old, has 106 stores in the UK and Ireland and 820 staff.
It is the second time since 2021 the firm has fallen into administration.
Several weeks ago, Paperchase said it had put itself up for sale and that a number of buyers were interested in the business.
Begbies Traynor, who have been appointed as joint administrators, said in a statement: “Unfortunately, despite a comprehensive sales process, no viable offers were received for the company, or its business and assets.
“However, there has been significant interest in the Paperchase brand and attendant intellectual property.”
Earlier on Tuesday, Sky News reported that Tesco was on the brink of buying Paperchase’s brand name and other intellectual property, but not its shops. The grocer declined to comment.
Begbies Traynor said the stationery chain would continue to honour gift cards for the next two weeks, after which redemption will not be possible.
It added that it would continue to “monitor trading” in Paperchase’s stores and provide further updates on the business’s future in due course.
Paperchase was only recently sold to a consortium led by retail investor Steve Curtis.
Another investor group had bought it out of administration in January 2021.