Borders is Bankrupt

What was expected to happen has happened: Borders filed for bankruptcy protection yesterday.

Borders, which has 6,100 full time staff, operates 508 namesake superstores as well as a chain of smaller Waldenbooks stores.

The company said it would close about 30 percent of its stores in the next several weeks and plans to continue to pay its employees.

Borders’ largest unsecured creditors include major publishers that provide the books it sells. Borders owes Pearson PLC’s (PSON.L) Penguin $41.2 million, Hachette Book Group USA $36.9 million, and CBS’s (CBS.N) Simon & Schuster $33.8 million, according to court documents.

Everyone involved with Borders is going to be hurt by this, from employees to publishers to landlords.

I’m not sure what the chain can do at this point to turn around its fortunes. Smarter, more business-minded people I’m sure are working on this situation. But between competition from Amazon and Barnes and Noble, and the emerging (and fast-growing) e-book market, there doesn’t appear to be a whole lot of room left for a major bookstore chain of any kind. It’s as if the bookstore chain model no longer works in the current market.

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5 thoughts on “Borders is Bankrupt

  1. I was thinking long and hard about this last night, attempting to sleep.

    I believe that there will be the few remaining used bookstores, and college textbooks (my word talk about expensive!), but how different will it be to have the kids being born right now, to possibly not know what a bookstore is?!?

    Tapes and VHS turned into CD’s and DVD’s, they are still in a reasonable format, having not involved much change. But not being able to purchase a new book from a actual bookstore 😦 That is beyond changing the format.

    Maybe they could have just changed normal print to extra-extra large print or super small print?! I could have dealt with that.

    • I still believe that the physical book will remain for keepsakes (signed author copies, special editions) and for posterity. It does what it does very well without it having to be plugged in or charged up, plus you can lend it to someone, and you don’t need to worry about digital formats. You’re right though. There will be fewer bookstores in the future, and most of them might just be only for used physical books.

      Yeah, textbooks are very expensive.

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  3. So sad to see another big chain go under. Not that I’m a chain store fan, but I’m sorry for everyone who will be out of work. On the other hand, I wonder how many independents went out of business when Borders moved into the neighborhood. I know someone who always buys books from a local bookstore, even though he doesn’t get any discounts. I have to admire that, especially since he’s usually a cheapskate.

    • Well, because so many independent bookstores were put out of business in the 90’s and 00’s by Borders and Barnes & Noble, there are many people who are not feeling so bad about Borders’ problems. I feel bad about the closing of physical bookstores and the loss of jobs, even if I don’t shop at them as much as I used to. Which means I’m part of the problem. 🙂

      We do a lot of shopping at our local small chain (of three stores), Schuler’s. In fact, we’re going to make a trip there this afternoon to let our son pick out a book. He’s getting excited about reading.

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