Despite the suggestion that the consolidation of Borders and Angus & Robertson's would lead to higher prices the Australian Competition Commission will allow the sale of Borders stores to Pacific Equity Partners. The resulting combination will be considerably larger in number of outlets than Dymocks which is the only other national chain.
A&R is likely to reassess their entire chain and perhaps close some of the non-performing stores. They may also look to consolidate more retail traffic by opening larger Border's branded superstores in both urban and suburman locations. Thus far, PEP has not indicated how they will present the two brands (and Whitcouls in New Zealand) but it is probable that PEP will operate two types of stores similar to a B Dalton/B&N arrangement. Many of the existing A&R retail outlets I have been in are somewhat down-market and some look more like discount retailers than full service book retailers. Look for PEP to expand and accelerate the opening of larger Borders stores and consolidate some of the A&R business.
No official word on the price but it is estimated to exceed A$120mm. Whether this is a good number from Border's US perspective remains to be seen given the amount they have invested in the international operations.
Dymocks will also be forced to make some changes; however, their ability to do so across the entire range of stores is complicated due to franchising. With half the chain owner managed Dymocks have traditionally had difficulty (and resistance) pushing out corporate mandated initiatives. Regardless, the existence of a well funded, large and well branded competitor may help galvanize the Dymocks faithful. Dymocks could also embark on their own superstore expansion although where they would get the funding for this is anyone's guess.
The Age
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