Borders Group Inc.
acquired the U.K. stationary retailer Paperchase Products Ltd. four years ago to give it a foothold in a growing segment as it battled rivals Barnes & Noble Inc. and Amazon.com Inc. for market share in its core business. Since it closed the deal for $34.1 million in 2004, it has expanded the chain from 61 retail outlets in the U.K. to more than 100. It also opened Paperchase stores inside more than 320 Borders superstores in the U.S. and added a couple of standalone stores as well. Now, as it
shops itself to potential bidders, it seems the acquisition didn't add enough to the bookseller's bottom line to offset losses, and Borders is looking to sell the U.K. chain.
Now there are lots of companies that have successfully acquired their way into new growth platforms (shameless plug alert: You can hear from some of them in October at our
Corporate Dealmaker Forum in New York), but in Borders' case, its foray into an adjacent business didn't provide the storybook ending it was hoping for.
- Suzanne Stevens
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Juergen Lasowski
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