Borders Books to Close 30 Percent of Its Stores Following Bankruptcy Announcement

by writing ashley in Economics, February 17, 2011

In a world of e-books and economic stress, the world of paper books seems to be collapsing. Borders will close over 100 stores in an effort to hang on through bankruptcy.

Borders quickly filed for bankruptcy protection after failed negotiations with several debtors, including some well-know publishers, to reorganize debt. According to the New York Times, this filing took place on Wednesday, February 16 but has been in the making for years. In a seemingly constant downward spiral, the once successful bookstore chain stopped paying publishers in December of 2010. In January, Borders had more bad news for publishers and venue owners– they still wouldn’t be making payments. Negotiations to work out the debt failed, as these publishers and vendors were less than convinced that the chain could make good on the money owed.

Faced with no other option, Borders has filed the bankruptcy protection and will be closing 30% of its stores in the coming weeks. This is more bad news, mainly for Borders employees who work in those locations. Approximately 193 locations will close. All of these changes are only possible following the bankruptcy protection filing, which will allow Borders to break contracts with publishers and venue landlords. With reported assets totaling $1,275,430,500 and debts totaling $1,293,122,600, as per the bankruptcy protection filing documents, they won’t be in the black without some aggressive paring down.

Michael J. De La Merced: The New York Times: Borders Files For Bankruptcy 2/16/2011