Book chain Borders in administration
RETAIL chain Borders has been placed into administration, putting a question mark over the future of its 1,150 employees.
The chain of 45 book shops blamed competition from the Internet and supermarkets for its demise.
The company – which is in the hands of insolvency firm MCR – has six shops in the North West.
The stores are located at Cheshire Oaks, Speke, Preston, Stockport,Warrington and Manchester Fort retail park,
Borders’ private equity owner Valco Capital has been seeking a buyer for some time. Clearwater Corporate Finance conducted a thorough marketing exercise in recent months.
In a statement MCR said: “The administration follows the continuing pressure on the retailer from increased Internet competition, which has accelerated over the last year with sales levels falling further behind prior year levels.
“As a result the company has suffered from severe cash flow pressure and several of the company’s suppliers have placed the business on stop or reduced credit limits. A number of credit insurers have also reduced cover to the company.”
MCR partner Phil Duffy commented: “All stores currently remain open for business as normal while the administrators undertake a review of the company’s affairs and seek a purchaser for all or some of the stores in which there has already been interest.”
“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.”
“The appointment of MCR as administrators to the business 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 online markets in this sector.”
Borders opened in Britain in 1997. Brothers Tom and Louis Borders established its American parent in 1971. It was spun off from Borders Group in 2007.
Liz Peace, chief executive of the British Property Federation, said: “Coming on the anniversary of Woolworths’ demise where 200 of its stores remain empty, the sad news about Borders throws open the large possibility of more empty retail space.
“And given that Borders’ outlets are large shops that often anchor shopping centres, it will not be as easy to fill these.
“With the pre-Budget report due soon, it is essential the government looks to extend empty property rates relief for all landlords and stop the damage that Gordon Brown has continued to do to retail throughout the downturn.”
