The company makes 40% of its sales during November and December, with far fewer Brits braving the high street this festive season.
Paperchase – which has 173 shops and 1,500 staff – was forced to shut its stores in Tier 4 areas over the Christmas period, with the measures putting "unbearable strain on retail businesses across the country".
It has since filed a notice to appoint administrators and lined up accountancy firm PwC, the Daily Telegraph reports.
A spokesperson said: “The cumulative effects of lockdown 1.0, lockdown 2.0 – at the start of the Christmas shopping period – and now the current restrictions have put unbearable strain on retail businesses across the country.
“Paperchase is not immune despite our strong online trading.
"Out of lockdown we’ve traded well, but as the country faces further restrictions for some months to come, we have to find a sustainable future for Paperchase.
"We are working hard to find that solution and this notice of intention is a necessary part of this work.
"This is not the situation we wanted to be in. Our team has been fantastic throughout this year and we cannot thank them enough for their support."
Following the introduction of a third national lockdown, all of the company's stores will be closed.
In March, it agreed to a company voluntary arrangement (CVA) – cutting rents at 100 shops and halving costs at 28 of its sites.
The Daily Star has approached Paperchase for comment.
Almost 180,000 retail jobs were lost in the UK last year, marking the worst year for the high street in more than 25 years.
The Centre for Retail Research (CRR) forecasts another 200,000 will be at risk this year.
Professor Joshua Bamfield, a director at the Centre for Retail Research, told the BBC: “The longer-term effects of the greater use by shoppers of all kinds of online retailing is likely to be hugely damaging for physical stores.”