What is the Future for Borders Bookstores After Bankruptcy?
On February 16, 2011 Borders,
the nation's second-largest book chain filed for bankruptcy protection closed more than 200 stores nationwide.
This step came a
fter years of increased competition, declining sales and months of missed payments to its vendors.
On July 18, five months later,
Borders Group announced that it will close all of its stores and sell the company to a group of liquidators led by Hilco Merchant Resources. It means that almost 11,000 employees will lose their jobs and the chain's 400 remaining stores will close their doors by the end of September.
We are following the news and updates on Borders since the beginning of the year, trying to provide you a better understanding on the events and their impacts on book sellers and the book industry. Links are brought to you in a chronological order. We try to keep this page as updated and hope you will find it useful!
Penguin Group (USA) - $41.1 million
Hachette - $36.9 million
Simon & Schuster - $33.8 million
Random House- $33.5 million
HarperCollins - $25.8 million.
The top 30 unsecured creditors are owed $314 million. The filing listed $1.27 billion in assets and $1.29 billion in liabilities. (source: Publishers Weekly)
No. of stores: 405 stores after closing an initial round of 237 superstores (July 14, Bloomberg)
Borders will close forever on Sunday, leaving tens of thousands of booksellers out of work. Below, we’ve included the final closure schedule for the remaining stores.
Edwards doesn't blame the book publishers, whom media accounts have portrayed as stubborn holdouts who questioned whether the company could emerge from bankruptcy.
"I don't harbor any ill will for how they approached it," Edwards said, adding that the publishers face their own sales and marketing struggles as e-books become more popular. "I think their view was, 'Do we really need to take on this risk when we don't know what the future holds?'"
The company will start closing down its remaining 399 stores as early as Friday, though the liquidation will likely last through September. The remaining number of Borders stores is only about two-thirds the number of locations the company had when they filed for bankruptcy protection on Feb. 16. Borders currently has nearly 11,000 employees that will soon be out of work.
Instead of offering condolences to the now-defunct retail chain, Kobo has gone on the defensive, trying to distinguish itself as “privately-held company that offers over 2.4 million” digital publications. It's also reiterating its independence from Borders as clearly as possible:
Borders Group Inc. stood on the brink of liquidation after a recent offer for the bookstore chain from a private-equity investor fell apart late Wednesday. The development raises the prospect that Borders will soon close all its remaining 399 stores and go out of business. No other suitors have so far emerged for Borders ahead of a Sunday bidding deadline.
U.S. Bankruptcy Judge Martin Glenn in Manhattan today approved a procedure to auction Borders’ assets that makes a group of liquidators, rather than Najafi Cos.’ BB Brands, the so-called stalking-horse bidder. Such bids, which provide protections for interested parties who do work valuing assets, become default purchase agreements if no other bids are made.
A judge on Wednesday reluctantly approved a deal to keep Borders Group Inc's (BGPIQ.PK) stores open while it seeks a buyer for its business, but said the bookseller was being "raped" by its bankruptcy lenders.
Borders Group Inc. on Thursday asked the bankruptcy court's permission to close the following 51 stores in order to satisfy a condition of its bankruptcy financing. Borders says it doesn't actually want to close the stores because that could make it impossible to sell them.
Najafi, a boutique Phoenix-based firm that usually makes investments of $1 billion or less, is competing with Los Angeles-based Gores Group to purchase the beleaguered bookstore chain, the people said.
Most of Borders Group Inc.'s bookstores could be sold in as quickly as two weeks, an attorney for the Ann Arbor-based bookseller said Thursday. Several bidders are interested in buying the bulk of Borders' stores, lawyer Andrew Glenn said Thursday at a hearing in U.S. Bankruptcy Court in Manhattan.
Starbucks Corp. (SBUX) unit Seattle's Best Coffee LLC asked a bankruptcy judge to reject Borders Group Inc. (BGP)'s request to end the companies' licensing agreement.
Borders Group Inc. (BGP), the bankrupt U.S. bookstore operator looking to reorganize, has so far failed to find a bidder for the entire chain, according to four people familiar with the matter.
Borders Group Inc. is in discussions with a potential bidder for more than 225 stores that would keep the bookstore chain operating as a going concern, said people familiar with the matter.
Edwards explained in the article : “All I can tell you is that we are here fighting to the end. We know we have a business plan that works, but it requires a lot of support to get it there, and our publishers are going to make or break our ability to transform this company at the end of the day.”
Borders Group Inc., the bookstore chain operating in bankruptcy, today reported a loss of $24.3 million for the month ended March 26, according to court papers.
The website, which has since gone offline, published a searchable database containing information associated with the Borders Rewards loyalty program, according to a blog post Saturday on a blog run by Borders workers and former employees.
Bankruptcy Judge Martin Glenn approved the bonuses in an order entered in Manhattan court today. At a hearing April 14, the bankrupt bookstore operator had proposed bonus payments that tied rewards for top executives to recoveries for creditors.
Borders presented a restructuring plan to its creditors on Wednesday that promised publishers and landlords a sleeker, more efficient company poised to emerge successfully from bankruptcy through increased online sales and revamped stores.
Borders today announced it is teaming with GREENZYS, a premiere literacy-based, eco-friendly children's brand, to enhance its already expansive educational toy and game offerings in-store and online with the eco-friendly Greenzys book and several plush toys depicting characters from the book.
If you're OK with the bonuses that's fine, but if you think that this is wrongdoing, it's time to voice your concerns and tell Borders - Stop the bonuses! If many readers, authors and publishers will do it, Borders hopefully won't be able to ignore it and will have to rethink about it.
Makes sense? Not to me. Why should the same executives who brought Borders to bankruptcy get rewarded? I understand that the executives play an important role in the recovery of Borders, but didn't they also play an important role in its failure?
For one, Borders’ executive suite has resembled a game of C-level musical chairs over the past two years. Consider: Edwards is the third CEO since 2009. Five rounds of layoffs in 2010 rocked the management team and the company began the New Year with the departure of five top executives, including the CIO and general counsel.
Book retailer Borders Group Inc., which is shuttering hundreds of stores in a bid to stay alive, is seeking bankruptcy court approval to hand out as much as $8.3 million in executive bonuses, including nearly $1.7 million to President Mike Edwards.
Book publishers, once Borders Group Inc.'s ally, are becoming an obstacle as the bookseller tries to emerge from bankruptcy. Publishers big and small are taking steps to secure their business in the wake of the superstore chain's failure, while casting a wary eye at its tentative plan for revival.
Borders Group Inc BGPIQ.PK is set to close another 28 of its superstores on top of the 200 locations it is already shutting down as part of its reorganization under bankruptcy protection. Those locations will close by the end of April and include stores in Hollywood, California, and Stamford, Connecticut.
Borders is exploring closing as many as 75 additional stores and hopes to present a formal business plan to publishers and other creditors in early April. The ultimate goal: exit bankruptcy in August or September, ready to ramp up business for the key holiday selling season, Mr. Edwards said.
Borders probably can't be saved. But what about Barnes and Noble? Over at GigaOm, Michael Wolf argues that they're going to need a radically different model if they're to survive:
A Fort Lee neighborhood shopping center and a Paramus mall are preparing to write the next chapter for two North Jersey buildings that now house Borders bookstores. The stores are scheduled to close by April as part of that chain's bankruptcy restructuring.
News that Borders would be closing 200 stores as it moved into Chapter 11 bankruptcy spread quickly on Wednesday. Southern California has 11 new stores slated for closure, including ones in Century City, Glendale and Pasadena. Vroman's, an independent bookstore located less than a mile away from Borders in Pasadena, was swift to respond. An e-mail to customers was sent out Wednesday afternoon, enticing them to trade in their loyalty to Borders for Vroman's.
This is a question that many of us at Borders asked ourselves frequently and I think the answer is not a simple one. As someone who has given this a tremendous amount of thought and was Director of Merchandise Planning & Analysis for many years, I've outlined my assessment below:
Borders is planning liquidation sales in the 200 stores it is shutting down as part of its Chapter 11 bankruptcy filing. "There will be opportunities for liquidation-type sales," said Borders spokesman Donald Cutler on Thursday. "Specifications about them will be revealed in the coming days and weeks."
After Borders, the 40-year-old retail chain that helped define the age of the book superstore, filed for bankruptcy protection on Wednesday, the struggling book industry was left wondering what was next — and maybe even who was next.
The decision by Borders, the nation's second-largest bookstore chain, to seek bankruptcy protection on Wednesday has prompted concerns for consumers, creditors and investors. Q: What about Borders' e-book partner, Kobo?
A: Kobo is telling customers, "Your e-book library is perfectly safe. The Borders e-book experience is powered by Kobo, an entirely separate company from Borders. Kobo is financially secure and will continue to maintain your e-book library no matter what happens."
What are the lessons of the Borders bankruptcy? Why couldn't management – and a little marketing savvy ripped out of the fashion retail playbook – turn things around? Lesson No. 1: All Goliaths eventually become Davids.
Borders, the 40-year-old chain that helped define the age of the book superstore, filed for bankruptcy protection on Wednesday, a widely expected move after years of increased competition, declining sales and months of missed payments to its vendors.
Publishers, who have anticipated the bankruptcy filing for months, said they hoped that it would be a chance for the beleaguered bookseller to reinvent itself. But they were also skeptical that the company’s deep-rooted problems could be overcome.
Borders' Woes Help E-Books - Jeffrey A. Trachtenberg and Paul Sonne, Wall Street Journal, February 14, 2011
A bankruptcy filing by Borders Group Inc., which could come within days, will mean fewer places for consumers to buy books, which in turn is expected to speed the pace of online and e-book sales. Borders has been putting the finishing touches on a store-closure program that could eliminate more than one-third of its 674 stores as part of a Chapter 11 restructuring, according to people familiar with the matter.
Borders Group Inc. is in the final stages of preparing a bankruptcy filing, clinching a long fall for a company with humble beginnings that helped change the way Americans buy books but failed to keep pace with the digital transformation rocking every corner of the media landscape.
With a bankruptcy filing almost certainly in the Borders bookstore chain's immediate future, LA Times writer Stephen Ceasar recently spent some time at the Glendale location (pictured), chatting with customers...The real trouble for Borders, as Ceasar points out, started exactly a decade ago, when the company's executives made a decision that today seems unfathomable:
Borders Group Inc., the second- largest U.S. bookstore chain, may file for protection from creditors as soon as next week, according to three people familiar with the matter. The retailer will likely close at least 150 stores, one person said. The people declined to be identified because the proceedings aren't public.
Cash-strapped Borders Group Inc. said Sunday that it will delay January payments to vendors, landlords and others, as indications grow that the bookseller could be headed for bankruptcy court. The No. 2 U.S. bookstore chain said the move was intended to preserve liquidity as it works to restructure its finances.
Faced with publisher reservations about its proposal to exchange missed payments for notes, Borders announced Thursday evening that GE Capital has agreed to provide the company with $550 million in new financing, but the deal is subject to a number of conditions, including receiving financing from publishers and other vendors to the tune of $125 million...And for the first time in public, Borders said it hasn't ruled out the possibility of bankruptcy.
How Borders arrived at this once-unthinkable moment is, like many stories of troubled companies, a tale of strategic errors, missed opportunities and revolving-door management (the chain is now in the hands of a former tobacco executive). But the company's collapse, though perhaps hastened by missteps, seems to many industry insiders to have been inevitable, brought on by cultural changes too swift and sweeping to fend off, even for a huge player in the nation's cultural life.
It looks like Borders' bankruptcy is becoming inevitable. As the AP reported last Thursday, "Borders Group Inc. has delayed payments to some of its vendors as the nation's second-largest bookseller seeks to preserve cash while it struggles to refinance its debt."
I wonder what the executives at Barnes & Noble think about it. I am quite sure they don't celebrate even though Borders is a significant competitor, but I wonder if they see it as a warning sign. Because I believe that even if B&N looks a little bit better shape than Borders, they're also in a very bad position and are next in line for bankruptcy. I still think that unlike Borders they have a chance to avoid it, but that will only happen if they'll learn the right lessons from the case of Borders.
I read yesterday on GalleyCat that Borders Group plans to close 17 Borders superstores nationwide after the holidays including one in Michigan. They also mentioned that Borders announced "they will use Google’s Local Availability tool and Meetup Everywhere to create a more interactive shopping experience."
The reason Borders is taking these steps is obvious - Borders is in trouble (On the second quarter Borders Group lost $46.7 million - this was the fifth time in six quarters they posted a loss) and is trying to cut costs and find a strategy that will transform its brick and mortar stores back into an asset.
