By Joseph Checkler and Eric Morath Of DOW JONES DAILY BANKRUPTCY REVIEW
Borders Group Inc. (BGP) filed for Chapter 11 protection Wednesday morning and announced that it would close about 30% of it stores nationwide in the coming weeks.
The struggling operator of the Borders and Waldenbooks chains sought protection from its creditors in the U.S. Bankruptcy Court in Manhattan a month after it warned it may have to restructure the company in Chapter 11.
"It has become increasingly clear that in light of the environment of curtailed customer spending ... and the company's lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor," said Borders Group President Mike Edwards in a statement.
The Chapter 11 filing will allow Borders to access new capital and reorganize its operations, Edwards said.
The company is launching a strategic review of its locations with the aim of closing underperforming stores. Earlier this week, a count of Borders stores using its store locator found it had 644 stores in 48 states, Washington, D.C., and Puerto Rico. Mary Davis, a spokeswoman for Borders, didn't immediately return a call seeking comment.
The Ann Arbor, Mich., company also said it has lined up a $505 million loan from GE Capital to fund its operations while in bankruptcy. Access to such a loan is subject to court approval.
In its bankruptcy petition, Borders listed assets of $1.28 billion and liabilities of $1.29 billion as of Dec. 25, 2010.
Borders' five largest unsecured creditors are the book publishers Penguin Putnam Inc., Hachette Book Group, Simon & Schuster Inc., Random House and Harper Collins Publishers.
Publishers are already telling authors to hold off if they had signings or events with Borders. DUH! LOL! Like the authors don't know this already. Yep, definitely something to keep an eye on. I don't believe they had any Borders here in the Houston area on their list of closings so far. If so then I overlooked the locations listed.
Sadly, I think most up to now conventional publishers and outlets will strugle against e-publishing. Only the boldest and the bravest will survive...
I am torn between Barnes and Noble and whether they can make it or not to be honest. A part of me thinks they might be able to if they can change fast enough with the times but the other part of me just isn't sure. I think that if they do wanna stay in business they will have to focus more on the Nook if they intend to compete because Amazon is killing everyone right now.
Guess we'll have to see but it would be something if brick and mortar stores were gone for good. I still can't believe what's happened to music and video stores. I thought they'd last forever. What's next, movie theaters?
What's killing the physical bookstores is price, selection and lack of convenience.
1. Bookstores don't have the selection that Amazon has and I don't mean just with indie books but with commercial books too. Not every book gets on the shelf and a lot of genres are dismissed by bookstores if they aren't popular with the mainstream.
2.Bookstores had much higher prices. You could buy the same book online way cheaper than in the stores.
3.People are busy these days and it's easier for them to download books from the net than to go out to a bookstore all the time. I am that exact person. I love ebooks and now I'll only read a print book if the book isn't available in ebook. I even skip the book altogether now if it's only in print! I love the format and the ease of it. It's just too tempting and enticing to be able to get tons of books at your fingertips within minutes and not having to worry about all the space to keep them in. I am not saying I don't appreciate print anymore but I definitely understand why ebooks are winning out.
4. Sign of the times. Things just change and the world of literature is changing.
A lot of people say that buying online can't mirror the experience of browsing a bookstore. Sure that's true but if people were that crazy about browsing bookstores then bookstores wouldn't be in the trouble they are in. Obviously browsing bookstores and being able to lounge in them while searching for books no longer carries the weight it once did.
Funny thing was back in 2009 a lot of people argued with me when I said I felt that bookstores might be dying and look what's happened? Some could see the writing on the walls. I don't want bookstores and libraries to die out but I am not sure if they will survive in the end.
Look at what's happening to post offices! Never thought they'd be in so much trouble but they are.
I buy only on Amazon. Book stores have not treated me well. This is the only way I can retaliate.
We buy some books from Amazon, maybe four or five a year. I buy my ebooks from Kobo (I have a Literati Kobo ereader), but my wife and I frequent a couple of local bookstores - one used - quite often.
I think its been a year or more since I've stepped into a Barnes and Noble.
I agree, I.J. As an author and reader I was unsatisfied with bookstores.
Barnes & Gobble never get my money. Like IJ, if you treat me very badly, I remember forever. I buy from Amazon and a couple of small bookstores around the country who stocked my books. I pay a little more for the book at the independents, but I like supporting friends.