November 24, 2009

The demise of Borders UK


It looks like the wheels are coming off of Borders UK, and the company could be in bankruptcy by the time you read this. As The Times of London reported in this story yesterday:

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.

Meanwhile, distributors and wholesalers — including giants, such as Gardners — are starting to stop shipments to the company. According to this report from The Bookseller yesterday, “This means trading between Borders UK and at least two of the big four publishers — Hachette UK and Random House — as well as the Faber-led Independent Alliance, is currently on stop.”

On top of that, another Bookseller story says “Borders’ website has stopped taking customer orders, with staff in store told earlier today (23rd November) that they are no longer allowed to place customer orders.”

Finally, a story that went up on the Independent‘s website late yesterday says Borders is “thought” to have lined up “an administrator,” meaning it is preparing to declare effective bankruptcy as soon as today.What’s more, reporter James Thompson makes the interesting — and perhaps telling — observation that “the timing of a potential stock liquidation sale would be beneficial in the run up to Christmas.”

And, in a follow-up commentary, it is also Thompson who makes the most poignant observation of them all, in the form of a question: “Is this the final chapter for traditional bookshops?”

Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.