BusinessBusiness RecoveryMCR opens book on Borders administration

MCR opens book on Borders administration

Book retailer enters administration weeks before Christmas but administrators hope to sell it as a going concern

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’

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