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Chapters Inc. was formed following the merger of Coles and SmithBooks, then Canada’s two largest bookstore chains. In 1994, Canadian General Capital and Pathfinder Capital purchased SmithBooks from Federal Industries, and later that year acquired Coles from Southam Inc. The strategy was to build a strong base company and use its financial strength to invest in the development of large format book superstores.

In April 1995, the merger of SmithBooks and Coles was finalized, and in November 1995, the new company, Chapters Inc. opened its first two book superstores and from there grew to become the largest book retailer in Canada, operating bookstores in all provinces, under the names Chapters, Coles, SmithBooks, and World's Biggest Bookstore. [ Source: www.chapters.indigo.ca ]