The collapse of Borders UK won’t have surprised many market watchers. Specialist booksellers have been having a tough time for years – firstly hit by the bargain basement prices offered by the supermarkets, then the rise of online giants such as Amazon. Borders didn’t help itself either, but its collapse is bad news for the high street and many will still lament its demise.
Waterstone’s, however, won’t. The HMV Group-owned bookseller has been struggling itself and holding back the performance of its parent company, so the demise of Borders UK could be just the tonic it needs.
Borders UK’s closing down Sales are bound to hit Waterstone’s in the run-up to Christmas – as the closure of Woolworths did to toy retailers last year – but next year Waterstone’s should have a clear high street run.
Waterstone’s has stores located close to the majority of Borders UK’s 45-shop portfolio, and analyst Singer estimated the sales transfer could be as much as £25m and £30m – equivalent to a 45% to 50% boost to the bookseller’s EBIT.
HMV Group is no stranger to seeing off the competition, and is already the last man standing in high street music retailing. And while there are smaller book chains such as Foyles and Blackwell still attracting loyal shoppers, if Borders UK disappears altogether there will be no other major high street specialist book chain.
But while Borders’ collapse will give Waterstone’s some short-term respite, it doesn’t change the fact that books retailing is in a state of flux. Borders UK was not its biggest rival – it is the internet. So while it will undoubtedly benefit from being the only major player in the bricks and mortar market, it won’t stem the flow of sales to the internet.
The disappearance of Borders UK may be the end of one bookseller. But it is not the end of the challenges facing Waterstone’s. It has just moved on to the next chapter.
Jennifer Creevy is news editor of Retail Week