Oh man – and here I was saying that Borders US and Borders AU weren’t linked. Financially, they’re not – the US firm sold off the AU operation years ago, so maybe it’s a co-incidence, since its parent company REDgroup Retail has been in financial difficulties for years.
In any case, it just got to be an even bigger news story, and another kick in the guts for pbooks.
As the The Sydney Morning Herald reports:
REDgroup Retail, owners of Angus & Robertson and Borders stores in Australia, and Whitcoulls stores in New Zealand, has been placed into voluntary administration by its private equity owner PEP, and has had a troubled few years… REDgroup was forced to call in administrators to the businesses this afternoon following a board meeting. Although its flagship Borders franchise is expected to remain open in the short term, its future in Australia and the jobs of its staff are now in doubt.
The report continues that the administrator says the Borders chain will stay open in the short term, while administrators conduct an urgent assessment of the business’s financial status and prepare for the first meeting of creditors, which is likely to take place in the first week of March.
You’ll remember that REDgroup lost $43m in the last financial year, and has had to explain itself to the NZ stock market recently.
They also had a series of job losses and the resignation of its CEO recently. That was the writing on the wall.
Um. Wow. At least I’ve got a small ebookstore open now. Anyone wanna buy a book? I’m not going broke.
This is massive news in Australasia. If REDgroup does get liquidated, that takes out three of the largest book chains in Australasia: Borders and Angus & Robertson in Australia and Whitcoulls (est 1882), the largest book chain in New Zealand.
I knew the pbook industry was struggling, but not this much. Jeez.
Via Jason Davis’ Book Bee blog
Where I lived with I was in NZ in 2005, Whitcoull’s was not just the biggest book chain, it was the only one 🙁 I suppose it’s easy for me to be sanguine about print bookstores in this land of an Indigo in every shopping mall, but in a country where this may be the only game in town, and where ebooks are hampered by geographic restrictions, this is very bad news.
I have just come back from the Borders shop in Riccarton. Found out while there that Borders is operating a real scam if you try to use a gift voucher, then they say that $1 on the gift voucher is only worth 50 cents and you have to buy twice as much to use the voucher.
This is contrary to the Consumer Guarantees Act but Borders/ Whitcoulls will be thinking that a normal gift voucher is worth say $40 to $50 so no one will take them to the Disputes Tribunal.
How about we all get togther and pool the cards together and take the bastards on. I am prepared to organise it as it is just an Australian corporate scam on New Zealand consumers.
Peter – All you could succeed in doing is joining the conga line of unsecured creditors. You have an entitlement to $X worth of books from Borders in exchange for your gift card, in the same way that publishers have an entitlement to $X for books they’ve delivered to Borders (although they’re in a better situation because depending on the terms of their contract vis when title passes, they can walk in to the shop and recover the actual books).
What you don’t have is a *secured* right, in the same way that the banks who lent them $100’s of millions of dollars do.
So whilst it would be immensely fun to go to Court for a winding up order over your $50 gift voucher, it wouldn’t actually get you your $50.
Redgroup are now in voluntary administration
http://www.asic.gov.au/asic/ASIC.NSF/byHeadline/Creditors%20-%20Voluntary%20administration
You can take what they’re offering (Which isn’t quite as you described – They’re offering to cash the full face value of the voucher, on the condition that you spend 2x the face value of the voucher), or you can register as a creditor with the Administrators. You’ll rank equally with other unsecured creditors (like publishers, their cleaning contractors and anyone else who hasn’t been paid but isn’t a bank or an employee), and whatever percentage of their unsecured debts Redgroup can pay, you will share equally in (If it’s 10%, you’ll get $5 on your $50 gift voucher)
Having said all that, if you walk in to Borders today and buy a book, you’re kind of robbing the publishers and authors – They’re almost certainly not getting paid for that book.
Not buying from them is a sure fired way of forcing them into liquidation. A curious strategy for anyone wanting to keep book stores open ……….