Book firm fights for future

Nov 24 2009 by Iain Laing, The Journal

BOOK store chain Borders is holding emergency rescue talks as it fights to secure its future.

The group, which also includes the Books Etc brand, is said to be in discussions with firms including Waterstone’s parent HMV as fears mount it could be forced to call in administrators this week.

It is understood WH Smith walked away from a takeover deal on Friday, dashing hopes that it would secure a sale of the bulk of its store portfolio to the retailer.

Borders - bought in July under a private-equity backed management buyout - was thought to have been looking to offload 36 of 45 stores to WH Smith.

Borders is believed to be concerned it does not have enough cash to make it through the key Christmas trading season, having suffered increasing competition from supermarkets and online book sellers.

The group is also believed to have struggled amid the tough trade credit insurance markets, which has made it hard to secure stock from suppliers.

Borders was originally owned by the US book giant of the same name, but the UK and Ireland arm was sold to buyout group Risk Capital Partners - headed by Channel 4 chairman Luke Johnson in 2007.

Management, led by chief executive Philip Downer and finance director Mark Little, then bought the group back with financing from Valco Capital earlier this year.