MCR opens book on Borders administration

MCR has been appointed administrators to High Street book chain Border after BDO backed out of the work because of conflicts of interest.

Philip Duffy, Geoff Bouchier and David Whitehouse of MCR are appointed joint administrators of the company, which has 45 branded shops including Books Etc.

Borders recently suffered "severe cash flow pressure" and several of its suppliers stopped or reduced credit limits.

The book retailer also had problems with credit insurers as many reduced cover over the last year.

The company received a blow earlier this week as BDO Stoy Hayward refused to carry out the administration as the retailer were about to request the appointment in court.

In a statement BDO said it had discovered conflicts of interest when " identifying the risks involved in taking on any client appointment," the Daily Telegraph reported.

Borders were bought by its management earlier this year. It was backed by Valco Capital Partners, the private equity arm of restructuring specialists Hilco.

It is believed the book seller, which has approximately 1,150 employees, suffered increasing competition from the internet and supermarkets.

The administrators are working with management in an attempt to sell the company as a going concern.

Duffy said: "All stores currently remain open for business as normal whilst the administrators undertake a review of the company’s affairs and seek a purchaser for all or some of the company’s stores in which there has already been interest.”

He added: “All outstanding employee wages have been paid up to date and ongoing wages for retained staff will continue to be paid as an expense of the administration."

“The appointment of MCR as administrators to the business is indicative of the weakening position of book retailers in the current market with competition on bestsellers from supermarkets and the growing strength of the digital and on-line markets in this sector,” he continued.

Earlier this week the Publishers Association, the publishing industry's trade body, was unable to find a way for publishers to continue trading with the chain the Daily Telegraph reported

Further reading:

R3 predicts high street 'bloodbath'