British Bookshops enters administration

British Bookshops enters administration

<p>British Bookshops has gone into administration with recovery specialists Zolfo Cooper appointed today (13th January). No redundancies were made on the appointment of joint administrators Simon Appell, Fraser Gray, and Stuart Mackellar. The business, which employs 300 people across the south of England, will continue to trade as normal.</p><p>Rumours about the chain&#39;s future have been circulating since the beginning of this week, with <em>The Bookseller </em>reporting <a href="../news/144004-mdl-puts-bbs-on-stop.html" target="_blank" title="http://www.thebookseller.com/news/144004-mdl-puts-bbs-on-stop.html">earlier today that book distributor MDL had stopped supplying the chain</a> over an unpaid bill. The company is understood to have experienced, what one well-placed source described as, &quot;horrific&quot; trading over Christmas, with like-for-like sales down by double digits. This was exacerbated by its rapid growth over the past year from 39 to 51 stores a process that stretched finances</p><p>GA Europe, which has been appointed to assist Zolfo Cooper in the administration, said: &quot;The chain&rsquo;s trading performance declined in the latter part of 2010.&nbsp; Bad weather also severely impacted Christmas sales, which came in below expectations.&quot; </p><p>Appell said the administrator&#39;s appointment was &quot;unfortunately the result of cash flow difficulties suffered by the business, coupled with the tough trading climate for retailers and especially booksellers at present&quot;. He added: &quot;This is an attractive company with a large network of stores across the South of England and we have already received expressions of interest from potential buyers.&quot;</p><p>The business recorded a turnover of &pound;25.7m in the year to end-January 2010, but made a loss of &pound;6m. However, m.d. John Simpson, who led a management buy-out of the business from private equity firm Endless at the beginning of last year, told <em>The Bookseller </em>in November that he <a href="../in-depth/feature/134537-southern-comfort.html" target="_blank" title="http://www.thebookseller.com/in-depth/feature/134537-southern-comfort.ht... to return the company to profit</a> in its next financial year. Simpson declined to comment when contacted this week by <em>The Bookseller</em>. Its website stopped taking orders last weekend.</p><p>A well-placed source said the bookshop owes around &pound;10m to publisher creditors. Endless is also a creditor as 50% of the sale price to the buy-out team was in deferred payments. The source said: &quot;British Bookshops needed inventory for these stores and the capital expenditure stretched their outflows. I think they opened a hell of a lot of stores and stretched themselves. If I&#39;d have owned it, then I&#39;d not have expanded.&quot;<br /><br />Another source said: &quot;With the benefit of hindsight, the company looked over-confident, particularly in a tough market which has been brutal for all except Amazon, some supermarkets and a few good independents.&quot; </p><p>BBS&#39; history goes back to 1938 when the first Sussex Stationers opened in Haywards Heath. Brothers Michael and Jonathan Chowen bought the shop in 1971&mdash;for &pound;600&mdash;and slowly expanded it to 50 shops throughout the Southeast, incorporating books into the stock and renaming the chain British Bookshops, Sussex Stationers. It was sold to Irish bookselling chain Eason&#39;s in 2004 but was again sold in May 2009 to private equity firm Endless, owners of discount books chain The Works, after it proved to be drain on Eason&#39;s resources.</p><p>&nbsp;</p>