REDGROUP Retail, the parent of Angus & Robertson and Borders, has collapsed amid a massive downturn in consumer discretionary spending. The parent of the two leading bookstore chains in Australia was today placed into voluntary administration by Pacific Equity Partners, the private equity fund that has owned the business since 2004.
Redgroup Retail employs about 2500 staff across 169 Angus & Robertson stores and 26 Borders stores in Australia, as well as the Whitcoulls bookstore chain in New Zealand, the Supanews newsagency chain and the seasonal Calendar Club calendar business.
The company's financial woes are unrelated to those of the US Borders chain, which this month filed for bankruptcy.
Redgroup warned last year it was close to breaching its banking covenants following a downturn in sales.
The Redgroup board has appointed corporate recovery specialists Ferrier Hodgson to handle the administration, which is expected to see a number of underperforming stores closed.
Ferrier partner Steve Sherman said the bookstore chains would continue operating as normal while the administrators conduct an urgent assessment of the company's financial status.
A first meeting of creditors is expected to be held in the first week of March.
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