Leeds-based Lettershop was acquired by Paragon Group last summer after YM Group unravelled.
Paragon acquired the business as a going concern in a £750,000 deal, and it became part of Paragon Customer Communications, recently renamed Paragon.
Lettershop had traditionally specialised in complex, personalised direct mail work, with the Eco Mlr range of sustainable packaging products targeted at ecommerce customers added around three years ago.
In a statement, Paragon told Printweek that DM work currently produced in Leeds would be absorbed at its other sites.
Dave Reynolds, CEO of customer communications, lead supply and BPO at Paragon, said: “Following our acquisition of Leeds-based The Lettershop Group (TLG) last year, we have made the strategic decision to focus the site's operations on our packaging product range.
“This move will see an integration of the direct mail services currently provided by TLG into our other direct mail sites across the UK. Unfortunately, this has led to a number of staff members being put at risk of redundancy. We have not made this decision lightly, but it is necessary to ensure the long-term sustainability of the Paragon business and the services we provide to clients.
“We remain committed to the wellbeing of our staff and will look to support them in any way we can throughout this process. The Leeds site will remain in operation with its focus directly on the development of our sustainable packaging range,” Reynolds said.
The number of roles at risk was not specified, but sources close to the company said 87 jobs could go.
In its accounts for the year to 30 June 2022, which includes just a fortnight under Paragon’s ownership, Lettershop had 148 staff, down from 183 the prior year.
Sales fell 27% to £17.1m, and the firm made an operating loss of £1.2m (2021 operating profit: £1.42m).
Sales were down due to a decline in DM work due to market uncertainty, and because the prior year had included materials for the 2021 Census.
Lettershop runs a range of specialist kit including a Goss S4000 web that handles 965mm-wide reels and has a 1,240mm cut-off, Scheffer offline finishing and hybrid personalisation using Kodak high-speed inkjet heads.
