Borders to launch stock liquidation sales on Saturday
Saturday 28 November 2009
The failed bookseller Borders UK will launch a stock liquidation sale in its 45 stores on Saturday, dealing a blow to retail rivals in the crucial run up to Christmas.
Phil Duffy, a joint administrator at MCR, the restructuring specialist, said: “We are conducting closing down sales while we continue to seek a purchaser for all or some of the company’s stores.” The fire sale of stock will pile pressure on the bookseller’s rivals Waterstone’s and WHSmith, as well as Asda, Tesco and Amazon.
Mr Duffy added: “All outstanding employee wages have been paid up to date and ongoing wages for retained staff will continue to be paid as an expense of the administration. However, at this stage it is far too early to comment on any potential redundancies and all employees are being kept abreast of developments.”
HMV Group, which owns the eponymous retailer and Waterstone’s, is thought to be interested in picking up a handful of Borders’ stores. But WHSmith walked away from the potential purchase of 22 stores a week ago, which left Borders UK teetering on the brink.
Meanwhile, Paperchase, the stationery retailer, could lose nearly £10m of annual sales if Borders’ stores close. The coffee shop Starbucks, the computer game specialist Game, and the gadget retailer Red5 also face lost sales, if MCR fails to find a buyer who wants to keep their presence in the stores.
Paperchase said it trades in 39 Borders and Books etc stores, which account for “less than 15 per cent of UK sales”. Pre-tax profits at Paperchase, which has 120 stores and concessions in the UK, fell by 20 per cent to £6.5m, on sales up 8 per cent to £61.7m in the year to 31 January. However, a spokeswoman said: “Paperchase is comfortably profitable without Borders UK.”
A Starbucks spokeswoman said: “Until the situation at Borders becomes clear, we’re unable to speculate on the future of the 36 Starbucks coffeehouses located in Borders’ stores. However, we are in close contact with our employees and are keeping them as fully informed as possible.”
Game has 19 concessions in Borders, while Red5 has 11, but both companies own the stock in Borders’ stores.
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