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Staples and Paperchase come together

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British stationer Paperchase is to pair up with US giant Staples to sell its products across 1,200 American stores and globally on Staples.com.

The deal will see the up-market stationers, previously owned by US bookseller Borders, increase their Impressive 115 stand alone stores, 28 UK concessions, 22 European concessions and 10 franchises in the Middle East.

The news comes after the retailer increased pre-tax profit 18pc for the year ending February 1, and an increased turnover of 13% from £84.9mn to £95.8mn.

In an exclusive interview for Retail Gazette, Chief Financial and Operating Officer of Paperchase David Bateman said: “We have a trading history in the US over a number of years and delivered annual sales in excess of $50mn. This deal with Staples will take Paperchase products into 1,200 Staples stores and online, helping to raise our profile in this important market and reconnecting us with the American consumer.

Speaking of the increased exposure Mr Bateman added: “It will enhance our business in the US which we see as a key growth area, both in store and online. It will support our future growth plans in this important market and help us grow sales and profits internationally.”

Paperchase was founded by two art students, Judith Cash and Eddie Pond in 1969. Its design-led innovation stationery paved the way for unique gifts that boasted high quality and fresh inventive products on the high street.

In 1985, they received financial investment from WHSmith. The growth enabled them to expand to Paperchase Products Ltd in 1996.

Turbulent times followed when international book and music retailer Borders Group, obtained Paperchase through buying out private equity group Graphite Capital who had invested in the company.

Borders went on to sell its UK and Irish divisions to Risk Capital for £10mn in 2008, retaining a 17pc stake and in 2009 Borders UK went into administration. Paperchase lost 38 borders concessions as their presence on the British high street dwindled. The stationers built networks with HMV and Waterstones. The deal that saw them open 15 concessions in 2010-2011 but that shrunk to 7 by 2012. A management buy-out of Paperchase from Borders valued the company at £20mn in 2010. Management took 30% and the investors Primary Capital held the rest. The collapse of Borders took Paperchase’s US concessions with it, but Chief executive Timothy Melgund planned to recoup profits and add up to 200 Paperchase stores.

In their continued attempts to brush off the threat, Paperchase turned its attentions to the online market, as its virtual operations have grown to be a £4mn division of the business alone, thanks to an association with online fashion giant ASOS. Paperchase chief executive Timothy Melgund said: “I was sceptical, but I’ve been proved wrong-its grown into a nice, steady business and growing.”

Mr Melgund added: “People are sending more cards than ever before. The price of a card is nothing compared to a cup of coffee but people value the time and effort it takes to write and send a card.”

Now, the design conscious greeting card retailer is foreseeing the growth overseas with the expansion into retail giant staples. Keen to step up its operations David Bateman says the new deal will “hope to gain an improved profile in the US through greater visibility and awareness of our Brand.

“We have put careful thought into our Staples range which includes notebooks, journals and albums as well as tote bags, gifts and accessories. The Staples collections reflect some of Paperchase’s iconic designs including one that is vintage-inspired. We look forward to seeing how the staples consumer reacts to the ranges and use this insight to plan our future US product offerings.”

The changes for Paperchase highlight the increasingly competitive market in stationary retailing. New stores Smiggle, and Blott are making their mark in what has been a difficult 5 years for the industry. As revenues decline and competition from supermarkets and internet intensifies, leading power players like Staples are influencing the industry, and shaping the way forward.

Published on Wednesday 12 November by Editorial Assistant
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