WHSmith walks away from Borders deal

WHSmith has abandoned talks with bookshop chain Borders, which is set to see Borders UK enter administration unless a sale is imminent.

Borders is understood to not have sufficient cash to see it through to Christmas as it has suffered amid increased competition from supermarkets and online retailers, such as Amazon.

As a result, the chain has been in talks with retailers after it appointed advisers to try to find a buyer for the business as it struggles to secure its future.

Borders’s latest available financial figures reportedly show that pre-tax losses soared to £13.6 million from £10.3 million.

According to the Daily Telegraph, WHSmith walked away from talks last Friday. However, it is understood that Waterstones owner HMV is one of the firms in discussions to buy some of the Border UK’s stores.

The UK arm of Borders was bought in July from Channel 4 chairman Luke Johnson’s Risk Capital Partners, in a management buyout backed by Valco, a private equity firm.

The news comes exactly one year after it was revealed that High Street giant Woolworths was running out of cash amid challenging conditions in the retail industry.

The economic downturn has claimed many victims in the retail industry including furniture giant MFI, Zavvi and Tower Records.

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