Paper Plus ran ruler over Whitcoulls, had $35m funding arranged

The co-operative franchisor was eventually pipped by NBR Rich Listers Anne and David Norman.

BUSINESSDESK: Paper Plus New Zealand, the co-operative franchisor of the Paper Plus, Take Note and Office Spot book and stationery stores, got "very close" to acquiring the Whitcoulls business from administrators last year.

It was eventually pipped by NBR Rich Listers Anne and David Norman.

The Auckland-based group's 2012 financial statements show it recognised a one-time cost of $254,000 for "professional fees for due diligence on Whitcoulls". The company recorded an operating profit of $326,000 in the 12 months ended March 31, down 39% from a year earlier.

"We had a very serious intent and we got very close," chief executive Rob Smith told BusinessDesk. "It came down to ourselves and the Normans."

Paper Plus's offer was "very competitive" and the outcome may have come down to the vendor's concern about Commerce Commission clearance, he says.

Paper Plus's report says it "secured funding of over $35 million" after completing due diligence.

The Normans acquired the Whitcoulls and Borders New Zealand book store chains for an undisclosed sum last year after the failure of Australian parent RedGroup Retail.

The Norman's James Pascoe group has retail brands including Pascoes, Farmers, Stewart Dawsons, Stevens and Whitcoulls.

Revenue at Paper Plus slipped 0.5% to $17.1 million last year though total income dropped 2.3% to $21 million, which the company says reflects fewer stores changing ownership.

"Given the extremely tough environment in which we continue to trade, the results, while not where we would like them to be, are encouraging," chairman Michael Paardekooper says in the report.

Sales in the book and stationery sector as a whole in New Zealand fell 3.4% in the same period, which "shows we continue to grow market share".