Borders U.K. chief executive Philip Downer has ruled out store closures "in the near future," following the retailer's management buyout. Downer and finance director Mark Little led a buyout of the business, backed by Valco Capital Partners, which was announced yesterday (July 16).

Downer said that among the immediate plans was a working capital injection, as well as new borrowing. He told The Bookseller: "In the short term there will be greater cash flow as we open up a new borrowing line. Beyond that it's ensuring the range, systems and processes in store are in place in order to maximise trade this Christmas."

Downer refused to discuss how much was paid for the business, his own personal stake, or how much money would be injected into the business. However, he said that the business did not go into any form of administration as part of the buyout.

Nevertheless, he was stark about the issues facing the company. He said: "It will be extremely challenging but it is for any business that is not selling the basic staples like food. But I wouldn't be talking if I didn't see an opportunity to sell more products to more people and make money. But make no mistake, this is a tough environment."

Downer appeared to rule-out further store closures and redundancies. He said: "There was a pretty significant slimming down of the head count in the store support office over the past 18 months. We run a pretty tight ship. We've never overstaffed our stores." Borders U.K. sold the leases on five of its stores earlier this week to fashion retailer New Look, with more than 100 jobs expected to be lost as a result.

Downer stressed that no fundamental changes would be made to Borders' offer. He said: "It will continue to have books at its core with a broad range of entertainment products gathered around it. Books remain at the core but to maximise margin in stores, we have to provide as many products as possible."

Former parent company Borders Group in the U.S. retains the 17% stake it had following its sale of the retailer to Luke Johnson's Risk Capital Partners in 2007.

The deal marks Johnson's exit from the business and he will no longer continue as chairman. Downer refused to answer whether he thought the retailer had received sufficient funding from Risk Capital Partners. He said: "We had an excellent relationship and achieved some extraordinary things. We extracted the business from the U.S. and fundamentally restructured it. It was a very successful period."

He said that Borders would benefit from cash and systems management support from Valco. He added: "There is also a network of companies that VCP can access that will open some product sourcing opportunities."

A conference with general managers, head office staff and suppliers is planned within the next few months and Downer said he was looking forward to talking to publishers.

He refused to comment on the disruption to supply, which was reported in the Bookseller this week. Publishers had complained that they were being kept in the dark over the chain's future, since its emerged that it was seeking new investment.