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British Bookshops bullish after buyout
18.03.10 | Catherine Neilan
British Bookshops has entered a phase of expansion following a management buyout last month that saw ownership of the retailer shift from private equity firm Endless.
Led by managing director John Simpson, the buy out took place in February. In the past three weeks, two new stores have opened—one in Guildford and one in Brighton—with plans to launch further branches throughout the year. Endless, which provided “a working capital facility”, forecast a return to profitability in 2010 “for the first time in several years”.
Simpson said: “The business is back under control. We have got the cost-base in line with what we wanted . . . and we have had great support from the landlords and suppliers, and continue to do so.” Redundancies were among the cost-cutting measures: the business now employs 400 people, 200 fewer than at the time of the original buyout by Endless last May.
He added: “We have all sorts of plans to open new stores and further develop the business,” stressing the deals were “still being finalised”.
“We are going from strength to strength. There is a real gap in the market, created not only by [the closure of] Borders, but lots of independents going out of business, and we think we will be able to fill that gap,” said Simpson.
“We have completely revamped the books range, brought thousands of new titles in over the past six months and we have started to see the benefit of those sales, as our market share is improving. We are still very closely tied with Endless, who have given us really fantastic support. They are keen to see the deal work and so are we.”
Endless, which also owns discount specialist The Works, bought British Bookshops from Eason in May 2009 for an undisclosed sum. The Irish book chain had part-owned it since 2004, and took full control of the company in 2005, in a deal then estimated to be worth £30m.
Before its investment last year the 40-store retailer had become “loss making and a drain on its parent”, Endless said on its website.
“This acquisition rescued a failing business and provided a solution to the vendor, where closure, funding of significant future losses or potentially an insolvency were the only other realistic outcomes,” the company added.