Borders sale -- going, going, gone

Borders Group, Inc., in a press statement on the 10^th of June 2008 said that it has closed on the transaction to sell its Australia/New Zealand/Singapore businesses to A&R Whitcoulls (ARW), the leading Australasian retailer of books and related products owned by private equity firm Pacific Equity Partners (PEP). Borders website says that the final agreement was made on the 5^th of June 2004. (One wonders about the effect of this announcement on Borders Malaysia, which we believe is not part of the Borders group but a franchise.)

But some commentators have reacted with 'shock and horror'.

Stephanie Johnston, of Wakefield Press worries about buying patterns or the philosophy change under the new ownership. She worries about greater discounts (from publishers) and 'pushing up prices to maintain margins' though she is 'looking forward to being paid earlier by accounting offices on the ground here in Australia'.

Others are less charitable. Another publisher says, "I'm worried that A&R's degree of aggression
and incompetence will infiltrate Borders' management." Ouch. It appears that A&R has a reputation of 'cut(ting) back its buying enormously, making initially tiny orders even on books that seemed a natural fit.'

But Peter Phillips, the departing sales and marketing director at Pan Macmillan is more pragmatic: "... if they don't do a good job, then someone else will pick up the market."

Meanwhile, in a AP report, 'William Ackerman, the billionaire hedge fund manager who is a major stakeholder in Borders Group Inc., said ... the bookseller should consider approaching online retailer Amazon.com Inc. about a possible acquisition'.

The report quotes him: "Amazon could buy the company for about (US)$400 million to get those
locations that would take more than (UD)$1 billion to build, "he told reporters on the sidelines of a conference in New York. "You have to think of it like how Apple has retail stores across the
country."

So, it looks like the death of 'brick-and-mortar' has been greatly exaggerated.

Borders

The Age

Associated Press (at Yahoo)