Bad Break For Borders

More than 1,000 staff at book and music retailer Borders will lose their jobs on Christmas Eve unless a buyer is found before then.

MCR, the firm’s administrators, tempered the bad news by also revealing it’s in “advanced talks” with a number of parties interested in buying all 45 of Borders’ UK outlets.

The company went into administration Nov. 26, with liquidation sales starting three days later.

Borders, like Zavvi and Woolworths before it, has come under severe competition from Internet competitors and supermarkets.
Waterstones owner HMV, which is already rumoured to be interested in buying the multi-faceted Mama Group, has declined to comment on its interest in the Borders chain.

Borders was originally owned by the US book giant of the same name, but was sold in June 2007 to Risk Capital Partners, which is headed by Channel 4 chairman Luke Johnson. Risk Capital then sold it to private equity firm Valco earlier this year.

The retailer was then caught up in the Icelandic banking crisis as a result of a £23 million loan from the now defunct Landsbanki. By last Christmas its suppliers were struggling to secure trade insurance.

Four months ago, chief executive Philip Downer led a management buyout backed by Hilco, which has loaned Borders £8 million.

Ever since the buyout, Borders has been fighting for its survival, even resorting to advertising itself for sale in the Financial Times.