Well, not known for novels that an adult might read, but well-established as a publisher of children’s books. Before Harry Potter they’d published a number of successful children’s series like The Baby-Sitters Club, Goosebumps, and Animorphs.
The first Harry Potter book wasn’t particularly popular. It was between books 2 and 3 that the hype started. Most YA authors can’t keep the quality going but JK Rowling actually got better and better.
Also, the Borders Children’s buyer was extremely into the series and was influential in its success. Cite: I worked for Borders HQ at the time.