The administrator of collapsed bookstore group RedGroup Retail will begin closing unprofitable Angus & Robertson and Borders bookshops next week, potentially putting hundreds of staff out of work.
At a meeting of creditors in Melbourne yesterday, administrator Steve Sherman of corporate restructuring firm Ferrier Hodgson said management already had considered closing several stores before the group was placed in administration on February 17.
"We recognise that this has some hurt factor to it; we're not blind to that," Mr Sherman said.
"When we do make that decision (to close shops), it's not because we want to make it; it's because we have to make it."
Wages would continue to be paid, although any staff who were dismissed would have to wait to receive any accrued leave entitlements, he said.
Mr Sherman said the company owed $7.8 million in entitlements to its 2500 staff and $118m to a subsidiary of private equity group Pacific Equity Partners, which bought the business in 2004.
see also IUF Private Equity Buyout Watch
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