Borders Sells Stationery Arm Paperchase to UK Private Equity Firm
Under the agreement which is set to close next week, Borders will continue to purchase and sell Paperchase products in its 337 stores and use $25 million of the proceeds to help pay down the $90 million term loan credit facility the company agreed to in April in order to keep itself afloat.
"The sale of our Paperchase business is another major step in strengthening our balance sheet - and enables us to place an even greater focus on our financial and strategic initiatives, which are vital to a Borders turnaround and revitalization of the brand," said Borders CEO Mike Edwards in a statement. "We look forward to continuing our strong relationship with the Paperchase team to provide our customers with the wide array of fashionable gift and stationery products they've come to expect from Borders."
The deal comes just a month after Borders laid off an unspecified number of Paperchase staff, its third round of job cuts in 2010, six years after the company originally bought a majority interest in Paperchase for $24.1 million and one week after launching an e-bookstore.