UK bookshop chain Borders has recently gone into administration, which is putting over a thousand jobs at risk over the festive season. When discussions of a possible sale fell apart, an administrator was brought in to keep the stores open while a buyer was sought. As in much the same way as with an individual bankruptcy, someone is brought in to oversee the sale of assets in an effort to meet the debt repayment. In the case of Borders, the assets they have are store premises and stock. The difficult situation that is inherent to the sale of a bookshop’s stock is the likely opposition to a firesale by publishers who will make every effort to prevent having their stock liquidated. This is due to the model of sale-or-return on which most of the book trade is based.
Borders was originally founded in the founded in the US in 1971 by the Borders brothers. Borders UK was established in 2007 and has 45 stores, nine of which trade under the name of ‘Books etc.’ however, they have struggled to compete against online and supermarket sales. In fact, in the year ending February 2008, they recorded a loss of £13.5 million. If you compare this scenario to that which would affect an individual facing insolvency, the options open to the individual are far greater. At various stages of your ever worsening financial situation, there would be opportunities to seek out debt help that could halt the threat of impending bankruptcy. There are various alternatives, providing you act quickly enough to capitalise on them. If only Borders UK could’ve opted for an IVA. The Individual Voluntary Arrangement has saved thousands of people from bankruptcy, letting them keep their homes and other assets. Obviously, it’s not an option for Borders though.
Their stores will stay open while the administrators look over the books, no pun intended. Their aim is to find a buyer for the entire company but failing that, its constituent parts. HMV, owner of Waterstone’s, is a potential buyer but WH Smith has withdrawn their interest after being involved in preliminary negotiations. If you’re facing the threat of mounting debt, selling off some of your assets, perhaps downsizing your home or simply cutting down on expenditure can help to fend off insolvency. The first step though, should always be to seek out professional debt help from a specialist debt advisor. Take the free, fifteen second Debt Wizard at Harrington Brooks and find out the best solution to your debt problem.