Borders Books Sells Australian Stores
Are the lights going out at Borders Books?
Borders Books completed the sale of its Australian, New Zealand and Singapore business to A&R Whitcoulls (ARW), the leading Australasian retailer of books.
Borders Group will receive proceeds of approximately $95 million (AUD) or approximately $90 million (USD based on current exchange rates). Additional deferred payments of up to $15 million (AUD) or approximately $14 million (USD based on current exchange rates) will be paid to Borders Group on or about March 31, 2009 if certain performance targets are achieved.
As part of the agreement, ARW … will have the right to use the Borders brand throughout Australia/New Zealand/Singapore consistent with a brand licensing pact that is part of the agreement.
On the face, Borders is simply continuing it’s quest to reduce debt and create liquidity. Pull back; get the financials in order; join the ecommerce party (better late then never); and launch new concept stores in the US. This would all put Borders in a better position to compete with Barnes and Noble.
But these moves also make Borders far more attractive to a buyer like … oh, Barnes and Noble. Remember, Barnes and Noble is a US centric company and would likely purge any international businesses they acquired. Less debt to inherit is certainly attractive, right?
Then there’s the new online business just launched by Borders. It’s interesting that both Barnes and Noble and Borders rely on Alibris to drive much of their used books business, more so for the latter than the former. Finally, the new Borders concept stores echo the Barnes and Noble brick and mortar strategy. How difficult would it be for them to claim some of this real estate and quickly transform them into Barnes and Noble stores? Not very.
Obviously I could be reading a lot into nothing. But couple this with the recent corporate job cuts, dwindling employee perks, store employee hour cutbacks and the accelerated return of merchandise to publishers and you get a real sense of urgency that speaks to a pending purchase and not a return to greatness.
June 10th, 2008 at 9:54 pm
I agree with a lot of what you’re saying here. As someone who’s worked in the Canadian publishing industry & seen a similar situation (Indigo buying out Chapters), it looks like a lot of the decisions Borders has made recently add up to making them look more salable.
If this does happen, though, my best of luck to the U.S. publishing industry (not only because a large portion of our industry up north relies on what happens down there). Having one chain lord over the retailing of books in a country is certainly not healthy.
June 11th, 2008 at 6:19 pm
[…] BORDERS sells Aussie stores. […]
June 15th, 2008 at 2:52 pm
[…] “strategic alternatives process”. Putting aside this pet peeve, Borders has already sold the Australia business, so they’re not just talking but actually following through on these “strategic […]
July 11th, 2008 at 9:10 pm
Dear Borders,
To add some spice to your choice of mediocre standards I would like to offer you 2 choices:
www.steelmarkonline.com to begin questioning the many aspects of our existence.
and why not here as in the US sell this book titled;
“The prosecution of George Bush for Murder” by Vincent Bugliosi
Take the plunge and be brave!