WH Smith starting out on bid for Paperchase
RETAILER WH Smith has been linked with a possible £50m bid for stationery chain Paperchase.
Paperchase has been put up for sale by US books and music group Borders and WH Smith is mulling an approach, according to a Sunday newspaper report.
A tie-up between the two firms would add around 100 Paperchase UK stores to WH Smith’s 1,000 existing shops on the high street and at motorway service areas, airports and train stations.
It would be the latest acquisition move for WH Smith chief executive Kate Swann after her £19m deal to strengthen the group’s presence in hospitals across the UK by buying UNS Hospitals in March.
But she may also face competition for Paperchase, which was founded more than 30 years ago. Games and music retailer HMV and private equity firms are also reportedly showing an interest in the chain.
Investment bank JP Morgan Cazenove is said to be handling the sale process for Borders. A WH Smith spokeswoman said: “We never comment on rumour or speculation.”
At interim results in April, WH Smith posted an 8% rise in half-year profits to £64m after stronger trading at its travel locations offset a sales drop on the high street.
The retailer said results reflected a stronger focus on core products, such as books and stationery, and £4m of cost savings at its high street arm. Ms Swann remained confident in the company’s performance for the full-year, despite an uncertain economic environment.
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