The Bookseller.com

2nd December 2008

A 'handful' of Borders shops under threat

24.09.07 Philip Jones

Borders' new owner Luke Johnson plans to relaunch Borders UK's online store when its relationship with Amazon comes to an end later this year. In an interview published in the Observer on Sunday, Johnson also said he would be closing a small number of stores. "We will probably shut a few of the shops that are not contributing, but we're talking about a handful."

Johnson also outlined a possible expansion into computer games, stationery and toys, but a retraction from CDs and DVDs. Borders' online sales are currently handled by Amazon, an arrangement that was due to finish at the end of this year. Johnson intends to launch a Borders retail website next year, following Waterstone's lead.

"Books are different, as people have always argued through the ages," the 45-year-old tells the newspaper. "They are a cornerstone of civilisation, so they're not quite like other consumer products." Johnson adds: Actually the book market continues to grow, which is encouraging. I think people are reading more, and the fact is only about 30 or 40 per cent of people ever buy a book, so there is potential for a greater proportion of people to buy books." But he warns: "Obviously the retail climate is mixed, and we're going to have to work hard to put in place some changes that we think could lead the turnaround of the business."

Johnson, who remains Channel 4 chairman,  also said that Channel 4 will soon run a series to encourage young people to read.

Johnson's Risk Capital Partners bought Borders UK and Ireland stores for a £10m up front cash payment plus an additional deferred £10m cash consideration. Borders Group will retain an equity interest of around 17% in the business. Johnson's move for the business was first revealed on theBookseller.com one month ago.

The transaction includes all 41 Borders superstores in the UK, the Borders superstore in Ireland and all 28 Books Etc stores in the UK. Risk Capital Partners also retains the right to use the Borders and Books Etc brand names. Risk Capital Partners has set up a new, wholly-owned subsidiary, Bookshop Acquisitions, for the purpose of acquiring Borders. Chief executive David Roche will remain as c.e.o. of Borders UK and Ireland and will become a shareholder going forward.

Guardian

Philip Jones Borders Luke Johnson

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