Borders UK to close struggling Books Etc stores
Tuesday 29 September 2009
Borders UK has confirmed it plans to remove the Books Etc and Borders Express brands from the high street. The bookseller – which in July completed a management buyout backed by the retail restructuring specialist Hilco – is trying to sell its remaining seven Books Etc shops and two smaller format Borders Express stores.
Books Etc has been a financial millstone around the neck of Borders UK for a number of years. The retailer's spokesman said: "I can confirm that our future strategy is single-brand." Earlier this month, Borders UK said it would close its Books Etc outlet in Staines, Surrey. The company, which has 36 core Borders stores, came close to collapse in July under its previous owner Risk Capital Partners, the private equity vehicle of Luke Johnson, the Channel 4 chairman.
But the bookseller was rescued at the 11th hour by Hilco's investment arm Valco Capital Partners in a management buyout led by Philip Downer, the chief executive of Borders UK.
The company is also negotiating with landlords to restructure or reduce the leases on some of its Borders shops, with one believed to be its branch at the Briggate in Leeds. However, the spokesman insisted: "There are no imminent plans to close any Borders stores."
The bookseller is thought to be particularly keen to restructure leases on its larger outlets – which could involve sub-letting floor space, putting in more concessions or negotiating a reduction in space with landlords.
Risk Capital Partners bought Borders UK from its US parent in the autumn of 2007 for £20m, but the retailer had been struggling for years. Over the past 12 months, Borders has suffered from credit insurers withdrawing insurance cover for suppliers, the surge in book sales by supermarkets and online retailers such as Amazon, and from expensive rents on its big shops.
In July, Borders sold five shops to the fashion retailer New Look, including its London flagship on Oxford Street. Last year, it sold eight Books Etc stores to Waterstone's, which is owned by HMV.
The retail consultancy Capa is marketing the remaining Book Etc stores and working with landlords to downsize or restructure some leases on Borders stores. Capa and Hilco, the retail debt specialist which tried to buy Woolworths last year, declined to comment.
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