The US bookseller was this week expected to complete the sale of its Australia, New Zealand and Singapore businesses to Australasian book retailer A&R Whitcoulls (ARW) for US$104 million (£53.2 million).
As a result of a cost-cutting initiative to save US$120 million (£61.4 million) announced in May, Borders will axe 274 corporate positions at its Michigan headquarters in distribution, marketing and sales.
The cost-cutting follows the retailer’s announcement of its strategic review in March, when it secured a US$42.5 million (£21.7 million) loan from its largest shareholder, Pershing Square Capital. The review could include a sale of all or part of the group.
ARW, which is owned by private equity company Pacific Equity Partners, will hand over about US$90 million (£46 million), with a further US$14 million (£7.2 million) to be paid to Borders on or about March 31, if performance targets are met.
ARW, which owns and operates more than 260 stores, will hold the rights to the Borders brand in the three countries.
Borders group chief executive George Jones said: “This transaction represents an attractive valuation, permits us to forgo further investment in these businesses and provides our company with a significant cash infusion to further reduce debt, which is one of our key financial initiatives.”
Borders is reviewing its UK business Paperchase, which was put up for sale last month (Retail Week, May 16).
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