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Fresh fears were raised over the survival of High Street bookseller Borders today after its website closed to trading, staff at stores said they had been told to stop accepting advance orders, and at least three distributors severed links with the retailer.
Borders, which also has the Books Etc brand, was thought to be in discussions with rivals including Waterstone's-owner HMV about selling the business, but concern is now growing that the retailer is on the brink of collapsing into administration.
Customers trying to buy a book on Borders' website got the message “Sorry, title cannot be purchased” this morning.
In stores, including its 11 London branches, staff were telling shoppers that Borders was not accepting orders “due to a problem with [its] wholesalers”. At least two of the UK's biggest book firms, Stephen King's publisher Hachette UK, and Random House, which brings Dan Brown's titles to market, have cut off trading with Borders UK. Random House's distributor said it had “immediately stopped Borders UK Ltd and Book Etc accounts” after the bookseller blocked a payment.
Another major group, the Independent Alliance, which represents some of the country's biggest independent publishers, including London-based Faber & Faber and Profile Books, has also stopped trading with Borders, which means it faces a dearth of important releases in the run-up to Christmas.
In July, Borders' chief executive Philip Downer bought the business — backed by private equity group Valco — from Channel 4 chairman Luke Johnson's Risk Capital Partners. But last week Valco — a division of restructuring specialist Hilco — hired Clearwater Corporate Finance to sell the business. However, talks with WH Smith about buying stores have already collapsed. Administrator BDO Stoy Hayward is now believed to be on stand-by to be appointed at the firm.
Analysts at stockbroker Singer said Borders was now in “a situation comparable to Woolworths and Zavvi this time last year” as it flagged up “growing concern” about the firm.
Borders saw pre-tax losses spiral from £10.3 million to £13.6 million last year, according to its latest accounts in which its auditor, Ernst & Young, has flagged up concerns about its ability to continue trading as a going concern.
The bookseller has been struggling to survive against competition from online retailers, such as Amazon, as well as supermarkets.
It has also been hit by problems getting access to credit insurance — one of the reasons given for last month's demise of wineseller First Quench, owner of Threshers.
Reader views (3)
Again its a retail chain who probably don't own the shops as they are all rented where in order to get market domination they took the best available shops but paid a high rental, and like my shop, by the time I have paid the staff and the crippling business rates there's no profit left for the owners. The high street needs to be treated as a Major employment asset not as a cash cow for local councils, if the councils want to tax something they should tax all the Ebay shops who operate from home selling the same stuff as shops, and are able to sell them cheaper, because they dont pay business rates.
- Ann Other View, Real World, 24/11/2009 13:46
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This would be a shame as Borders is a very good shop, and a breath of fresh air compared to WH Smith etc.
- Simon, London, N5, 24/11/2009 12:22
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It may be interesting to some people to know that us employees have heard nothing official at all - in fact we have been lied to over the past few months about the state of the company. Hence why I am Googling 'borders administration' before 10am today.
- Borders Employee, North West, 24/11/2009 09:55
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