Borders (UK)

Borders (UK) Ltd.
Private
Industry Retail
Fate In Administration
Closure
Successor Booksetc.co.uk
Founded 1998
Defunct 24 December 2009
Headquarters Charing Cross Road, London, UK
Number of locations
 68 (At Peak)
45 (Final Closure)
Area served
 United Kingdom & Ireland
Key people
 Philip Downer (CEO)
Products Books, CDs, DVDs, Periodicals, Gift Cards
Revenue £210 million (2007) [1]
Profit -£9.5 million (2007) [1]
Number of employees
 2,185 (2007) [1]
Parent Borders Group 17%[2]
Website UK Website no longer operating.

Borders (UK) Ltd., aka Borders & Books etc., was established as a Borders Group subsidiary in 1998 and in 2007 became independent of the US company. At its peak after separation from the US parent, it traded from its 41 Borders and 28 BOOKS etc. shops, with over one million square feet of retail space taking around 8% of the retail bookselling market. In 2008 and 2009 the store numbers were reduced before the collapse of the chain. They also operated one single branch in Ireland, but closed this early in 2009. On 26 November 2009 it was announced that Borders (UK) had gone into administration. All stores closed on 24 December 2009.

A typical Borders shop in the UK contained both a Paperchase stationery and Starbucks cafe[3] concession. In addition, some branches also contained a RED5 gadget concession and GAME video games concession.

The logo contained both the Books etc. logo and the Borders logo to reflect the fact that Borders UK operated two different brands.

History

Borders on Briggate in Leeds, West Yorkshire
Borders in Southampton

In September 2007, Borders (UK) Ltd. was acquired by Luke Johnson's London-based private equity investor Risk Capital Partners in a deal purportedly worth £20 million. Bookshop Acquisitions Ltd. - a subsidiary of Risk Capital Partners - was specifically set up for the purchase and the deal included the right to use the Borders and Books etc. brand names consistent with the brand.[4] Under the deal, Borders would receive an equity interest of about 17% in Bookshop Acquisitions.[5]

In January 2008, David Roche stepped down as C.E.O. of Borders (UK) and was replaced by the chain's former managing director, Philip Downer. Upon his appointment, Downer called for a category review of the entire company although he made it clear there were no immediate plans to further change the structure of the business.[6]

Subsequently, it was announced in March 2008 that Borders UK planned to close its distribution centre (based in Cornwall) on 29 August, in favour of having publishers and wholesalers deliver directly to its shops, this being exactly opposite to the decision of Waterstone's who planned to test and open their own distribution centre, colloquially referred to as 'The Hub', from the end of May.[7]

In July 2008, Borders launched an e-commerce website. In a bid to try to take back a share of internet sales of books, the beta testing of their new transactional website commenced, due for full completion before the end of the month.

Borders sold eight London Books Etc shops to competitor Waterstones in August 2008 for an undisclosed sum.[8]

Five Borders shops in Oxford Street, Llantrisant, Blanchardstown, Swindon and London Colney were closed in July 2009 and replaced by New Look. After July 2009, Borders was owned by Valco Capital Partners, part of Hilco, who specialise in distressed retailers.[9]

At the end of September 2009, it was announced that the majority of the remaining Books Etc., and the two Borders Express shops, would be sold,[10] and closing down sales began shortly after.[11]

Administration

The company announced in November 2009 that it was looking for a buyer for the business following concerns that it would run out of money.[12] The following day the Borders website stopped taking orders for books, while orders for CDs and DVDs through the Borders Entertainment website continued as this was run by The Hut Group.[13]

On 26 November 2009, Reuters announced that Borders UK had entered administration, after reportedly having difficulties raising enough cash to trade through the key Christmas period. This article was soon withdrawn, and replaced with a corrected item reporting that the company was 'mulling' administration.[14] This news came on top of a difficult few weeks for the company, with the company reported to be on credit stop with all the major publishers, and still searching for a buyer following the breakdown of negotiations with WHSmith.[15]

Later that day, Borders (UK) Ltd officially went into administration. Initially the intention was to appoint BDO as administrators, but it developed that a conflict of interest existed.[16] Instead, MCR were appointed by Borders' owners—Valco Capital Partners, part of Hilco—as administrators. The BBC adds that MCR 'hired specialist liquidators Hilco to advise'.[17] A 'parallel strategy' was applied of seeking a buyer for the chain as a going interest, and running closing down sales.[18]

On the evening of 27 November 2009, it was announced that a closing down sale would commence in all stores on the following day. During the sales, sale stock included Denby China, a separate concern bought out by Valco Capital Partners earlier in 2009.[19] The publisher Hachette successfully took MCR to court for continuing to sell Hachette titles without first obtaining permission, obtaining a High Court judgement on 18 December 2009 that MCR were 'incorrect' to do so.[20]

MCR, the administrators for the chain, stated an intention of seeking a buyer. However, it is reported that a 'serious attempt' by Richard Joseph, co-founder of the Books Etc. chain, to buy a number of stores was rejected by MCR.[21] A spokesman for MCR confirmed that unsuccessful bids had been made which had failed to meet expectations. MCR announced that the 45 stores would cease trading and close their doors permanently on 22 December, claiming that it had not been possible to sell the chain as a going concern.[22] All staff members were made redundant on 24 December 2009.[23]

BOOKS etc

The BOOKS etc. name and its website and the Borders database were bought by The Capital Organisation in January 2010. The BOOKS etc. website was launched in March 2010. [24]

Awards

British Book Industry Awards
Bookseller Retail Awards

References

  1. 1 2 3 "Borders (UK)". Top Track 250 (2008). The Sunday Times. Retrieved 15 November 2008.
  2. ↑ Borders Group Held a 17% Equity Stake in Bookshop Accquisitions Limited, the company set up by Risk Capital Partners to take over Borders (UK) in 2007, however it is not clear to whether they held a stake in the company after it was bought out by Valco and the management team up until closure
  3. ↑ "Borders UK about us". Retrieved 13 October 2008.
  4. ↑ "Borders Group announces sale of Borders UK". WebWire.com. Retrieved 22 December 2009.
  5. ↑ "Borders agrees to sell UK & Ireland stores". Hollywood Reporter. Retrieved 22 December 2009.
  6. ↑ Neill, Graeme (31 January 2008). "Downer plans Borders review". The Bookseller. Retrieved 12 November 2008.
  7. ↑ Neill, Graeme (7 March 2008). "Borders closes distribution centre". The Bookseller. Retrieved 12 November 2008.
  8. ↑ Neill, Graeme (18 August 2008). "Waterstones takes on eight Books Etc shops". The Bookseller. Retrieved 13 October 2008.
  9. ↑ Wearden, Graeme (26 November 2009). "Borders future in chaos as administrators pull out". London: Guardian. Retrieved 26 April 2010.
  10. ↑ Thompson, James (29 September 2009). "Borders UK to close struggling Books Etc stores". London: The Independent. Retrieved 20 October 2009.
  11. ↑ "Closing down sale begins at Books Etc". The Bookseller. 18 October 2009. Retrieved 20 October 2009.
  12. ↑ "Borders' UK bookstores look for buyer". BBC News Online. 23 November 2009. Retrieved 22 December 2009.
  13. ↑ "Borders' website suspends book sales". BBC News Online. 24 November 2009. Retrieved 22 December 2009.
  14. ↑ Davey, James (26 November 2009). "CORRECTED - UK bookseller Borders mulling administration". Reuters.
  15. ↑ "Publishers working on lifeline for Borders UK". Bookseller.com. 25 November 2009.
  16. ↑ Wearden, Graeme (26 December 2009). "Borders future in chaos as administrators pull out". London: The Guardian. Retrieved 26 April 2010.
  17. ↑ "Borders starts closing down sales". BBC. 29 November 2009.
  18. ↑ "Borders Bookstores closing down for good". The London Insider. 26 December 2009.
  19. ↑ "Administrator uses Borders UK for pottery sale". The Bookseller. 14 December 2009.
  20. ↑ "MCR 'incorrect' to sell Hachette stock, rules judge". The Bookseller. 21 December 2009.
  21. ↑ "MCR rejected Richard Joseph bid for Borders stores". The Bookseller. 21 November 2009.
  22. ↑ "Borders shops to close on 22 December". BBC News. 22 December 2009. Retrieved 22 December 2009.
  23. ↑ "Borders jobs end on Christmas Eve". BBC News. 22 December 2009. Retrieved 22 December 2009.
  24. ↑ http://www.booksetc.co.uk
  25. 1 2 "BBIA Previous Winners". Archived from the original on 18 May 2008. Retrieved 2 November 2008.
  26. ↑ Neill, Graeme (21 September 2007). "Blackwell takes awards crown". The Bookseller. Retrieved 13 October 2008.
  27. ↑ Neill, Graeme (19 September 2008). "Waterstones picks up awards honours". The Bookseller. Retrieved 13 October 2008.

External links

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