Leadership

Borders UK enters administration as no last-minute buyer emerges

27.11.2009
Book chain Borders UK entered administration last night as the possibility of a last-minute buyer emerging receded, raising the spectre of a firesale of its assets before Christmas.

Insolvency company MCR was appointed to the bookseller as sales talks collapsed, placing 1,150 jobs at risk.

All Borders UK stores remain open for business as normal while MCR undertakes a review of the company's affairs and seeks a purchaser for all or some of its stores in which it has said there has already been interest.

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 its suppliers have placed the business on stop or reduced credit limits. A number of credit insurers have also reduced cover to Borders UK.

“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 on-line markets in this sector,” said Phil Duffy of MCR.

Borders opened in the UK for the first time in 1997 and currently has 45 stores there. Brothers Tom and Louis Borders established its American parent in 1971. It was spun off from Borders Group in 2007 and is currently owned by private-equity group Valco.

The book chain has already pulled out of Ireland, having closed its store in west Dublin.