BOOKSTORE Borders is preparing to close its last Australian stores after failing to find a buyer to help pay off its mountain of debt, but readers will still be able to buy its books online.

REDGroup Retail, which owns Borders and Angus & Robertson, had been on the hunt for a new buyer after failing to reach a deal on its multi-million dollar debt with landlord and book publisher creditors.

The chain’s remaining nine stores in Canberra, Sydney, Queensland, Melbourne and Perth will close by the end of July, leaving their 315 staff without jobs, said administrators Ferrier Hodgson.

But Borders' online operations, as well as Angus & Robertson's 61 locations, will not be affected by the closures.

Administrators promised to pay Borders’ employees entitlements accrued from the date REDGroup was placed in administration.



"Payment of entitlements accrued prior to the administration is dependent on final stock realisation, which will be known within the next few weeks," said Ferrier Hodgson.

Angus & Robertson and Borders were put into administration in February after REDGroup collapsed under high levels of debt.



At a meeting on March 3, creditors were told REDgroup owed at least $118 million, with unsecured creditors owing $44 million.

The combination of a downturn in consumer spending, increase in online shopping, the strong Australian dollar and bigger stores with excess stock are understood to be behind Borders' collapse.

REDGroup, which is owned by Pacific Equity Partners, was once Australia's largest bookstore owner.



Administrators still hope an agreement can be reached between the store and its creditors.



- With AAP