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Background

Borders UK was demerged from its ailing US parent in 2007 in a poorly managed process which left a legacy of system issues. Combined with falling sales as consumers moved away from traditional bookshops to online competitors and supermarkets, and reduced margins as a result of rapid price deflation, the business faced significant challenges. 

Hilco Capital acquired the existing bank debt from Borders’ lenders and provided a working capital facility and hands-on support to attempt to turn around the company’s fortunes. However, the challenges became too much for the business to bear with falling sales and failing inventory replenishment processes and the company entered administration.

Borders Logo
Borders Image

Hilco Capital’s role

  • Acquired bank debt in 2009
  • Provided £8 million working capital facility
  • Provided systems, space planning and visual merchandising support
  • Managed solvent closure of Books etc. fascia
  • Provided suite of operational management services to the Administrators across HR, IT, marketing and sourcing
  • Deployed 46 retail consultants to manage closure and handover of stores
  • Funded purchase of additional £4m of augment stock on behalf of the Administrators
  • Supported the Administrators in managing complex Retention of Title claims

 


Results

  • Books etc. closures delivered net cash recovery in excess of £2m – significantly ahead of management’s expectations from previous closures
  • Supplier negotiations and settlement of RoT claims allowed Borders to continue to trade in Administration
  • Provision of augment stock extended trading period while buyers sought
  • £27m net sales achieved in Administrator’s one month trading period
  • Overall inventory recovery to the administration of £10.3m
  • Additional cash recoveries achieved by Hilco Property managing disposal of store leases
  • Secured debt recovered in full
Borders Image