Struggling Borders Stores May Be Closed
Friday, May 29, 2009 13:22
The owner of Borders UK, the book-seller, is considering jettisoning some of its poorly performing stores.
Risk Capital Partners, led by Luke Johnson, the entrepreneur and Channel 4 chairman, has recruited RSM Bentley, the restructuring experts, to advise on its store network. Mr Johnson’s vehicle bought Borders UK, which included the Books Etc chain, from its struggling American parent in 2007 for £20 million. Some out-of-town locations are believed to be struggling, although the company itself is not in trouble. Books Etc lost its lucrative airport stores to WH Smith late last year.
Risk Capital has already scaled back the chain radically, from 79 stores in 2007 to 37 today. Borders Group, Borders UK’s former American parent, has been loss0making for several years as it struggles to adapt to mass-market and online competition.
Borders UK is also struggling against the Internet, while on the high street it faces stiff rivalry from Waterstone’s, the HMV-owned market leader, which said recently that like-for-like sales had fallen by 4.5% in the 16 weeks to April 25.
It has also been squeezed out of airports and railway stations by a resurgent WH Smith, which now has a stranglehold on BAA-owned airports, including Heathrow and Gatwick.
The market for travel books has fared particularly badly due to a fall in tourist numbers and the rise of travel websites. According to analysts, the maps and atlases are also declining amid the emergence of satellite navigation systems and sophisticated mobile phone technology.
Risk Capital Partners and RSM Bentley declined to comment. Borders UK has not filed up-to-date accounts since its acquisition by Risk Capital, but it was loss-making in the two years before its sale, companies House filings show.
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