A belated New Year delivery for Paperchase?

An impending financial year-end can inevitably bring about delays in corporate proceedings, but it’s quite unusual in the case of a private company, where a planned strategic change which has been delayed due to year-end makes it in to the broader public domain. 

But in the case of Paperchase, the UK-based stationary retailer, its CEO clearly signalled ten days ago that with the imminent Jan 31st year-end they are going to “tuck away the rest of the financial year to the end of January just to make sure there are no surprises and then look at opportunities."

Yet, if press reports are to be believed, then the opportunities for private equity owner Primary Capital to consider in order for it to exit its investment in the retailer seem to have come about a week earlier than Paperchases’s year-end. Primary Capital backed the Paperchase management to the tune of £20m back in July 2010 when the company bought itself out from Borders, the US book store chain that went into Chapter 11 bankruptcy a few months later. 

The potential opportunity appears to have come in the form of Card Factory, the UK card and gift retailer, which itself has not had the smoothest of rides since listing a 38% stake on the London Stock Exchange last year. Current reports put Paperchase’s valuation at around £150m and a purchase by Card Factory would potentially broaden both the range of products it could offer and its geographical reach, given that Paperchase have over 30 outlets overseas.