End of story for Borders
BORDERS book store chain yesterday fell into adminstration and appointed insolvency and restructuring firm MCR at the eleventh hour after the firm’s adviser BDO Stoy Hayward pulled out at last minute due to a conflict of interest.
BDO refused to comment. The ex-board of collapsed Woolworths recently warned that advisers should not act as administrators due to a conflict of interest over fees.
The collapse of Borders will affect 1,100 people at its 45 stores, some of which trade as Books Etc in the UK. The group was bought in July, by Valco Capital Partners, the private equity division of Hilco, the distressed retail specialist. MCR is understood to have a good relationship with Hilco, after working on the closure of MFI. MCR administrator Phil Duffy said that all stores will remain open while the administrators seek purchaser for all “or some of the company’s stores in which there has already been interest”. The company is not taking orders on its website and has launched “closing down sales” at some stores.
The book industry has been challenged in the downturn as consumers look to the cheapest deal, often available at supermarket. But Foyles book chain chief executive Sam Husain yesterday told City PM that while there was significant pressure from supermarkets on new releases, bookstores were able to compete on the experience and information they offered.
Husain yesterday said that Foyles was not interested in buying Borders as a going concern – but would be interested “in a number of stores in areas as and when they become available”. Husain added: “This industry is still worth £3bn – it’s not the end yet, definitely not.”