Owner REDGroup is still in the red with 10 out of its 13 companies in trouble.
Its book retailer won’t go into liquidation it now appears, and may trade its way out of its current crisis.
That’s according to its administrator Ferrier Hodgson, who confirmed this week some Borders stores would shut their doors in the near future.
“We are identifying these stores that we think … have outlived their useful lives,” John Lindholm form Ferrier Hodgson confirmed at a creditors hearing on Monday.
Its creditors are owed a bill to the tune of $44 million. However, its owner, REDgroup Retail appears to have bigger problems than just its ailing book seller.
It has emerged that 10 of its 13 companies that make up the group are currently in administration and has come under fire from creditors who blasted one manager at the group for his “Tesco” style business strategy, referring to the cut price British supermarket chain.
REDGroup who also owns and Angus & Robertson, had $6.4 million in cash, $170m in liabilities and $120m worth of stock, when the administrators were called in.
Despite this, REDGroup won’t go into liquiditation, says Ferrier Hodgson.
The company also owns Calender Club in Australia and New Zealand, retail franchise Supanews as well as NZ Whitcoulis, which is also in financial strife.
Creditors at the hearing were vocal in their criticism of the group’s senior management, with one bookseller, Edward Coffey, saying of one manager, “He wasn’t interested in books, he was interested in margins. This chap wasn’t a bookseller he was Tesco man.”
“It was absolutely booming for them,” said another creditor.
“But they didn’t understand who their customer was from the book side of the business.”