Borders UK, which was sold by the U.S. Borders Group in 2007 to Valco the private equity arm of restructuring firm Hilco, has filed for administration, which is the British equivalent of a U.S. corporate bankruptcy reorganization proceeding. AFP reports:
Borders UK, one of Britain's biggest booksellers, which also owns Books Etc, was seeking a buyer on Friday a day after going into administration, a spokesman said, brought down by competition from online and supermarket competitors.
The company has been hit hard by falling book sales as customers increasingly turned to the Internet and low-cost supermarket chains for their reading material.
It is unclear what lies in store for the chain's 1,150 employees, who have been left fearing for their jobs.
Borders has appointed restructuring firm MCR to take control of the business and it is understood that buyers have been lined up for some of the shops.
An MCR spokesman told AFP: "All stores are open. The company is trading through this administration and I can confirm that nobody has been made redundant. It's business as usual at the moment.
"They are trying to find a buyer. There is some interest out there in the market."
The administrators said Borders, which has 45 stores across Britain, had been struggling with "severe" cash flow problems and several of the company's suppliers had stopped or reduced its credit limits recently.
The Guardianreports that the bankruptcy filing was prompted by a failed deal to sell a majority of the company's retail stores to British bookseller W.H. Smith. There have been rumors that the parent company of Waterstone's might buy some locations, but there has been no confirmation of that so far.