The big news in February was Borders and Angus & Robertson going into voluntary administration. The predictable cries that it was all due to online shopping and ebooks were heard. These bookshops now, more inevitably to follow, the argument went. It’s true book selling is down but so is most retailing. More level heads came in later to say that REDgroup (owned by Pacific Equity Partners) had a bad business model plus the modus operandi of equity companies is to use debt financing to buy up companies cheap, strip them down, then sell them off for a big profit. When outside factors impinged on the book business, this model floundered. Sad for the staff who will lose their jobs – bookshop staff, even in the chains, always seem intelligent, nice and obliging to me.
I’m not of the camp that says Borders was a flawed model in Australia (See Mark Rubbo from Readings article). The Borders I frequented – the one in Parramatta and the one in Pitt Street Mall – always had plenty of customers and a good range of books. Sure they brought in the 3 for 2 discounts but this was quickly copied by other outlets like Dymocks, and they are still trading. I also notice today in the Sydney Morning Herald it says the administrators are looking for buyers for 103 Borders and Angus & Robertson stores. This obviously means they think the businesses are sound.