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Biggest New Zealand And Aussie Bookseller On the Block
John Mutter -- 6/5/00

The retail operations of Blue Star Group, which owns New Zealand's biggest bookstore chain and one of the three major chains in Australia, is up for sale, the company's U.S. parent has announced. Blue Star is owned by U.S. Office Products, which has hired Credit Suisse First Boston to help in the sale.

U.S. Office Products president and CEO Warren D. Feldberg commented: "We have been approached a number of times over the past several years by parties interested in acquiring Blue Star's retail group. This is a very valuable business with a strong brand identity. However, it is not a core part of our operations."

Blue Star CEO Tom Sturgess said the company anticipates "a wide range of potential bidders within New Zealand and worldwide." Blue Star has headquarters in Auckland, New Zealand. It owns Whitcoulls, which with its Bennetts, London, and Books & More subsidiaries sells more than 60% of all books in New Zealand; Blue Star has 91 New Zealand stores, 63 of which operate as Whitcoulls. It also owns a substantial stake in FlyingPig, the country's leading online book retailer. Blue Star has been phasing out the London chain, its more traditional stores. The new Books & More operation is a joint venture with New Zealand Post and offers full postal services, including bill paying.

In Australia, Blue Star owns Angus & Robertson Bookworld, which has nearly 160 franchised and company-owned stores and represents at least 12% of the book market, slightly ahead of Dymocks and Collins Booksellers, according to the Australian, a national newspaper. The two chains have combined sales of about $230 million annually.

U.S. Office Products took a 100% interest in Blue Star in 1996, after owning 51%. It later bought Whitcoulls for about $145 million, according to Bloomberg News. Parent company U.S. Office Products, Washington, D.C., has had a difficult year. For the first nine months of the fiscal year ended April 22, 2000, sales at the company, which owns Mail Boxes Etc. among other operations, dropped 6% to $1.9 billion, and its net loss was $81.2 million.
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