Borders to Sell Paperchase: A Good Short-Term Move

May.18.08 | About: Borders Group, (BGPIQ)

Looking for a price tag of about $80 million, borders (BGP) has put the UK Paperchase stationary retailer up for sale.

Paperchase has more than 100 stores and concessions, including ones in House of Fraser and Selfridges department stores in the UK. In 2005 it began opening concessions in US Borders stores.

Reports are that Goldman Sachs (NYSE:GS) has been hired to conduct a review that ought to lead to a sale. I am not sure this is the best thing long term for Borders but, given the current retail environment, it is a necessary step to pay down some debt, restore more liquidity and let's be honest, make it more attractive to a buyer.

Disclosure: Long BGP