It's the last chapter for books venture Borders
Sales bargains galore with all stores to close by Christmas Eve
Monday 14 December 2009
A decade ago, Borders was launched amid much fanfare as a fresh alternative for lovers of literature, a place where they could also pick up a coffee and a CD. Yesterday there was an equally eclectic but much sadder sale going on as the bookseller flogged off its remaining stock, fixtures and fittings, with all of its stores predicted to close by Christmas Eve.
The sale is likely to prove a bonanza for the money-conscious seasonal shopper. Unusually, among the items on sale are a range from Denby Pottery, and it is understood the Charing Cross Road branch is inviting people to make an offer on a piano.
Reports said that staff were expecting "Countdown to closure" signs to be put up in its stores today, with the fixtures at 14 stores already on sale. A notice on the company website which urges customers to come in and pick up a bargain as "All stores closing – hurry, final weeks!" adds: "The Administrators would ask that all customers and suppliers treat the staff with patience and courtesy as this is an extremely difficult and uncertain period for all employees."
Borders UK, which was launched in Britain by its parent US company in 1997, was supposed to offer an alternative to the traditional book seller with outlets in out-of-town shopping malls. But it has proved a victim of modern times, losing much of its sales to online retailers such as Amazon and supermarket giants. This summer, Philip Downer, the chief executive of Borders UK, insisted its future was secure after a management buyout. But three weeks ago, it went into administration, putting more than 1,000 jobs at risk, after it failed to find a buyer.
MCR, the restructuring and insolvency company, appointed by its management said the retailer, which trades from 45 Borders and Books Etc stores, had collapsed due to the increasingly competitive book market. In the year to February 2008, Borders UK's pre-tax loss widened from £10.3m in 2007 to £13.6m. That same year, Tesco, which already had a 6 per cent share of the UK book market by value and 10 per cent by volume, announced its intention to overtake Borders as the UK's fourth largest bookseller behind Waterstone's, W H Smith and Amazon.
Phil Duffy, the joint administrator at MCR, said that staff would continue to be paid as an expense of the administration while the closing-down dales continued.
Borders UK was bought from Borders Group, its US parent, for £10m in 2007 by Risk Capital Partners, the private equity group controlled by the entrepreneur Luke Johnson. But he resigned in July leading to the management buy-out of the group, backed by Valco, the private equity arm of Hilco.
Earlier this year, Valco acquired Denby Pottery, the 200-year-old manufacturer of premium tableware, in a management buyout.
HMV Group, which owns Waterstone's, believes it could benefit from the demise of Borders. The company, best known as a high street music and DVD retailer, suffered a half-year pre-tax loss of almost £25m, weighed down by the performance of Waterstone's.
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