Paperchase boss Timothy Melgund plans to retain stake in business after sale

The cards and gifting retailer’s boss says he has “not been surprised by the amount of approaches” Paperchase has received from interested parties, which include a mixture of strategic and trade investors.

At present Paperchase has 110 stores and is in the process of rolling out 15 new shops a year as it targets 200 stores in the UK.

The retailer is also preparing to launch ecommerce sites overseas as it seeks to expand its online retail business, which currently accounts for 3% to 4% of total sales.

Paperchase already has a US website, but plans to roll out websites in markets where it has a bricks-and-mortar presence, which include Denmark, Holland, France, Germany, Ireland and the Middle East.

Melgund said he hopes to stay on as boss of the retailer under the new owner, but points out the decision lies in the hands of the new owner.

He told Retail Week: “It is a great brand to work for and has a lot going for it. We are delivering on the three-year plan and in our current trading year we have EBITDA running comfortably ahead of budget.”

Paperchase’s owner Primary Capital has appointed PwC and Financo as financial advisers to handle a potential £150m sale of the business.

Primary Capital bought a 70% stake in Paperchase in July 2010 in a deal that left the management team led by Timothy Melgund with the remainder of the shares.