Thorn EMI closes 40 Dillons bookstores

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The Independent Online
Thorn EMI is closing 40 of the 140 Dillons bookstores bought for £36m earlier this month from the receivers. The closures will result in 317 redundancies among Dillons' 2,192 staff.

The high-profile chain of bookstores was put up for sale after Pentos, the parent group, went into receivership. Thorn succeeded in buying the stores despite a higher counter-bid made by Terry Maher, former chairman of Pentos.

The main reasons behind the closures are high rents that landlords refused to reduce, and poor locations.

Half of the shops that are going are Claude Gill bargain bookstores, which will be left with the receivers appointed from KPMG, the chartered accountancy firm.

Sir Colin Southgate, chairman of Thorn EMI, which has another high street presence through HMV record shops, said: "The property review identified a number of high-rent stores that failed to meet the criteria required for the successful future of the chain."

He added that it was imperative that "we focus on appropriate locations with commercial rents that make economic sense, a move which is essential to Dillons' healthy and competitive future."

Thorn EMI said it would honour the severance conditions incorporated in previous employment contracts. Cost of the redundancies is put at £420,000, equal to £1,325 per employee.

Most of the 100 stores being retained trade as Dillons, with the remainder comprising Hatchards and Hodges Figgis. The future of another six stores has yet to be decided.

The 100 stores accounted for 90 per cent of the £140m of sales made by the Dillons chain last year.

A spokeswoman for Thorn EMI said that the dispute with creditors had been fully resolved. Creditors, which were mainly publishers, accepted 65p in the pound and no returns of books for three months, after refusing the company's first offer of 50p.

Some publishers had threatened to stop supplying Dillons if Thorn EMI did not increase its offer.