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I’m concerned about the UK arm of bookseller Borders.
When you read as much retail news as I do – in other words, lots – you start to pick things out. Sometimes its good things – the turnaround of New Look into a fashion behemoth, for example, but as is the nature of the UK press, you more often pick up on worrying signs...and Borders have started flashing on my radar.
Some Borders headlines from the past few months:
What do you see? Whatever it is, I doubt it’s good.
The first headline, in my opinion, is the most worrying; historically, retailers start turning to landlords in the weeks coming up to something desperate – like CVAs.
Focus entered into their CVA just 8 months after begging Landlords for monthly payment terms, while JJB had a similar history before theirs.
I wouldn’t want to be put in a similar financial category as either of those retailers, would you?
Borders seem to have exhausted most other attempts at a turnaround; no one wanted to buy the chain back in June, when a corporate finance house was appointed to assess sale options (a MBO in July doesn’t count); no one really cared about the proposed re-vamp (I say proposed because I’ve seen no evidence of it); and closing stores didn’t seem to help either.
Moreover, I question some expansion decisions the company have made in recent months. I’m not sure moving away from your core product line in times of troubles is a good idea – especially not when you’re extending to such things as online dating! You’re a book seller Borders! Stop trying to compete with those who can – and do! - do it better!
I don’t know, maybe its not desperation, maybe they just have a nasty case of Amazonitus, but whatever it is, it doesn’t seem particularly well informed to me, and I don’t think the signs are good at all. Dr SnapShop is predicting some very bad news on the cards for poor old Borders UK in the not so near future.
Tell us what you think; should Borders concentrate on rectifying their existing problems, or is moving out of the dwindling book market the only way they can survive? Comment below, by choosing “Comments” from the links!
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