The Paper Store's bankruptcy could cut deeply with Hallmark. 

The Massachusetts-based specialty gift retailer filed for bankruptcy last week with the intention of selling all of its assets by the end of August.

In court filings, the company cited the usual COVID culprits: all of the Paper Store's stores were closed due to the pandemic, and store traffic declined after reopening. The Paper Store also missed out on three of its most profitable months - April, May, and June - with missed sales for Easter, Mother’s Day, and school graduation. Despite The Paper Store's move to furlough employees, reduce salaries for remaining workers, and miss rent for three months, the still company lacks the cash on hand to buy inventory for its highly-profitable Christmas season. And, all of this, is going to eventually hit Hallmark. 

Hallmark ($PRIVATE:PRIV_HALLMARK) is one of The Paper Store's largest unsecured creditors at $1.3 million, according to the Kansas City Business Journal. As an unsecured creditor, Hallmark doesn’t hold any assets as collateral and it could walk away with nothing if The Paper Store defaults. Hallmark has already experienced a financial jolt due to the pandemic. Hallmark reduced pay and hours for its employees who worked at corporate headquarters and it slashed executive pay by 20%. There were also bad signs of financial instability before the pandemic, with Hallmark eliminating 400 jobs in January.

A hallmark of Hallmark's recent social media activity is less than encouraging: first, its Facebook Talking About Count, above, reflects declining attention from the social network's users. The social woes don't stop there. 

As Hallmark attempts to recover from the pandemic, it needs to reconnect with consumers. However, its Twitter following decreased from 69,600 on May 18 to 69,200 on June 20 - signaling that this could be the peak for Twitter's social media attention span with consumers.

In the end, The Paper Store will likely have a new owner by the end of the summer - and a smaller footprint. As for Hallmark, it will probably need its own “Get Well Soon” card as it hopes to recover from the financial impact of the coronavirus.

About the Data:

Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales, and app ratings - and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.

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