Borders UK hires Clearwater to advise on sale options
Luke Johnson poised to exit his investment in chain
Thursday 04 June 2009
Borders UK, the bookseller backed by the entrepreneur Luke Johnson, has appointed a corporate finance house to conduct a potential sale of the 51-store business.
The bookseller, which operates the Borders and Book etc fascias, has hired Clearwater Corporate Finance to run any sale, although a sales memorandum has not yet been sent out. The appointment is the clearest signal yet that the Channel 4 chairman Mr Johnson – whose private equity house Risk Capital Partners acquired Borders UK for £20m in 2007 – is poised to offload the struggling bookseller. Market sources said that Borders UK, which is believed to be loss-making, could be sold for a nominal sum.
Borders UK declined to comment on speculation that it would be put up for sale, but a spokeswoman confirmed it had appointed an adviser to "seek out funding opportunities". She added: "We will be keeping our staff and suppliers fully appraised of this activity."
Borders UK is also still working with RSM Bentley, a restructuring company, which has looked at offloading its underperforming larger stores in out-of-town retail parks, as revealed by The Independent last month. Borders UK has also made a series of redundancies over the past year.
However, a sale of Borders UK could be complicated by the fact that Paperchase, the stationery chain, still has a substantial concession presence in its stores. Paperchase, which also has standalone stores, is still owned by the bookseller's troubled former US parent, Borders. Bankers appointed to sell Paperchase last year were unable to find a buyer.
The bookseller has suffered from the scaling back of its suppliers' credit insurance. Late last year, The Bookseller, the trade magazine, said that Euler Hermes was withdrawing its cover for suppliers to Borders UK from 31 December. Borders UK has also made a series of redundancies over the past year.
In September 2007, Risk Capital's acquisition included all 41 Borders superstores in the UK, the Borders superstore in Ireland and all 28 Books etc stores in the UK. However, since the acquisition, Borders UK has offloaded some of its Books etc stores.
The bookseller currently has 41 of its core Borders stores, eight Books etc outlets and two Borders Express shops.
The Borders UK spokeswoman yesterday said the time was now right for it to seek out funding, following the successful completion of a series of major structural changes in 2008, including investing in new IT systems, supply chain, the disposal of underperforming stores and the launch of a transactional website.
She said: "We are now well-placed to explore opportunities to take new retail space and develop new trading relationships at a time of significant format change in the products we sell."
Booksellers are suffering at the hands of the online powerhouse Amazon.com and the supermarkets snatching their sales of best-sellers. The ending of the Harry Potter series of blockbuster novels has also left a painful scar on their sales.
- 1 Forget 'The Dress': Here are five of the biggest news stories you might have missed
- 2 The black and blue dress: Makers considering a white and gold version
- 3 PornHub turns masturbation into energy in bid to save the planet
- 4 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
- 5 MH370: 'Putin ordered plane to be flown to Kazakhstan space port,' conspiracy theory claims
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
PornHub turns masturbation into energy in bid to save the planet
Ukraine crisis: Top Chinese diplomat backs Putin, says West should 'abandon zero-sum mentality'
White and gold or blue and black – what colour is the dress? An eyewitness gives a definitive answer
Saudi Muslim cleric claims the Earth is 'stationary' and the sun rotates around it
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
This is what it's like to be dead, according to a guy who died for a bit
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...