Sydney Morning Herald -Chris Zappone - June 2, 2011
When the music's over ... Last nine Borders to close their doors. Photo: Simon Schluter
The last nine Borders stores in Australia will be closed after no buyers could be found for the debt-laden bookselling chain, the administrator announced today.A spokesman for Ferrier Hodgson said 315 staff members would lose their jobs by the closures that would be completed by the end of July.
Angus & Robertson's 61 locations remain unaffected, Ferrier Hodgson said, as would Borders' online operations.
"The employees have shown extraordinary commitment in their efforts to keep the business going," administrator John Melluish said.
"Unfortunately, the reasons for the store closures are beyond their control."The administrators pledged to pay employee entitlements accrued from February 17, when parent company REDgroup Retail was placed in administration by owner Pacific Equity Partners. The company struggled under $118 million in debt, weak retail trade and surging competition from online sales.
Today's closure announcement comes as the latest national retail sales figures pointed to a revival, with turnover in April increasing at the fastest pace since November 2009.
The administration of Borders and Angus & Robertson stores has been a fraught one. On February 18, shoppers were angered when they were told that book vouchers would only be honoured if they spent $1 for each dollar on the voucher. Weeks later, they were told to redeem the vouchers by April 3 before they became void.
At their peak, Australia had 26 Borders stores. The closure of remaining outlets affects one Canberra store, Sydney's Bondi Junction store, as well as two stores in Queensland, at Chermside and Robina.
In Melbourne, the Carlton, Chadstone, Knox and Melbourne Central stores will all be closed. The Perth CBD store completes the list.
"Payment of entitlements accrued prior to the administration is dependent on final stock realisation, which will be known within the next few weeks," the Ferrier Hodgson statement said.
Administrators are understood to have reached an impasse with publishers and landlord creditors in recent days regarding Borders' debt, with the creditors unwilling to accept the lower repayment terms being offered.
Ferrier Hodgson laid off 34 head office staff this week and said a full closure of the retail chain was possible.
At the time, Ferrier Hodgson said it was "urgently" seeking the sale of all or part of the REDgroup Retail chain, which at its peak had 260 stores in Australia, New Zealand, and Singapore employing a total of 3477 people.
With today's announcement, Ferrier Hodgson has shut 64 Angus & Robertson and Borders stores.
Ferrier Hodgson last week sold off 57 New Zealand-based Whitcoulls and five Borders stores to the James Pascoe Group for an undisclosed sum, taking 900 more staff off the payroll of the bookseller.
Read more: http://www.smh.com.au/business/the-end-borders-to-close-remaining-stores-20110602-1fhlq.html#ixzz1O5KZM4Hb
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