From The Sunday Times
November 22, 2009
Borders UK in fight to halt collapse
Ben Marlow

Struggling book chain Borders UK is on the verge of collapse this weekend after WHSmith walked away from a rescue deal on Friday.
In an attempt to stave off administration, the high street retailer is holding talks with groups including HMV, which owns rival Waterstone’s and Edinburgh Woollen Mill.

However, it is thought that the companies it has approached are more interested in buying packages of stores.
The lack of appetite for a takeover of the whole company means that Borders could be put into administration this week. It would then attempt to sell stores to interested parties.
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There have been increasing doubts about the future of the company, which has seen its capital dwindle and its credit insurance almost halve, making it difficult to obtain stock from suppliers. The business has some headroom on its bank loans, but its management is concerned that it lacks sufficient funds to make it through what is expected to be a challenging Christmas period.

Borders was bought in July from Channel 4 chairman Luke Johnson’s Risk Capital Partners, in a management buyout backed by Valco, a private equity firm. As well as reduced credit insurance, Borders has been hit by competition from supermarkets and the increasing strength of online retailers such as Amazon.
Read the full piece at The Times online.