Borders UK collapses putting 1,150 jobs at risk

James Thompson
Friday 27 November 2009 01:00
Comments

Borders UK, the beleaguered bookseller, collapsed yesterday afternoon after a day of high drama in which the accountancy firm originally lined up as administrator walked away over a "conflict of interest".

The 45-store bookseller, which includes Books Etc, finally appointed the restructuring specialist MCR as administrator on Thursday, putting 1,150 jobs at risk. Borders UK had initially served a notice of intention to appoint BDO as administrator on Wednesday afternoon. But yesterday morning, BDO said it "uncovered a conflict which has prevented BDO from being able to act as administrators to Borders UK", but declined to say what this conflict was.

Phil Duffy, a joint administrator at MCR, said it is "indicative of the weakening position of book retailers in the current market with competition on bestsellers from supermarkets and the growing strength of the digital and on-line markets in this sector". Borders UK stopped taking orders on its website on Monday and a number of publishers had stopped supplies over recent days. Credit insurers had also reduced cover to its suppliers since 2008. MCR said that Borders stores will remain open while it undertakes a review.

After opening in the UK in 1997, Borders US sold the bookseller to Risk Capital Partners, the private equity firm of Luke Johnson, the outgoing Channel 4 chairman, in September 2007 for £20m. In July, Borders UK was sold in a management buy-out deal, backed by Valco Capital Partners, the investment arm of Hilco.

MCR said that all outstanding wages for employees have been paid. The administration – which comes one year after the collapse of Woolworths – could lead to a stock liquidation sale before Christmas, dealing a blow to rival booksellers Waterstone's and WHSmith. In the year to 2 February 2008, Borders UK's pre-tax losses widened to £13.6m.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in