Struggling bookseller close to selling off its 46 stores
By James Thompson reporting in The Independent.
Wednesday, 15 July 2009
Valco is offering to take on the Borders superstores, Books Etc and Borders Express shops in a deal that could save hundreds of jobs, although it is likely that some stores may close.
It is understood that up to two other companies are involved in separate discussions with Borders, although their intentions are unclear. The group has debts of less than £10m but it is thought its main bank Landsbanki is keen to sew up a deal in the coming weeks. Valco and Borders refused to comment last night.
The future of Borders has been the source of feverish speculation since the chain, owned by Luke Johnson's private equity company Risk Capital Partners, appointed Clearwater Corporate Finance to conduct a potential sale at the end of May.
Since Mr Johnson, who is also the chairman of Channel 4, and Risk Capital acquired Borders for £20m in 2007, the bookseller has struggled in a declining market for book shops, with huge sales volumes migrating online to retailers such as Amazon.
Valco Capital Partners is thought to have identified value in keeping Borders running, and is keen to retain the existing management team, including the chief executive Philip Downer. In March, the bookseller appointed the restructuring company RSM Bentley Jennison to review its business and what value it could extract from its portfolio of stores.
On Sunday, it emerged Borders was in the process of selling five of its branches, including its 39,000 sq ft flagship store in London's Oxford Street, to the discount fashion retailer New Look. The other four outlets were Dublin's Blanchardstown Centre, Llantrisant in Anglesey, London Colney and Swindon, and a massive clearance sale is under way.