Borders Book Group Files Chapter 11 Bankruptcy Petition
Posted on February 16, 2011
Well, it's official Borders Book Group has filed for Chapter 11 bankruptcy protection. Burdened by a large amount of debt and a shrinking cash flow the book retail chain turned to Chapter 11 to try to reorganize and become a viable entity once more. The New York Times reports:
The company currently operates more than 650 stores and employs 19,500 people. It listed $1.29 billion in debt and $1.27 billion in assets in a filing in United States Bankruptcy Court in Manhattan. As of the filing, Borders owed $272 million to its 30 largest unsecured creditors - including $41.1 million to the Penguin Group USA.It's a sad day in the book world. Borders plans on closing another 200 stores across the nation, leaving employees out of work and book publishers with even less shelf space to show their wares. Borders never quite got the digital revolution: it lagged behind in having an online presence, and couldn't compete with Amazon.com's Kindle and Barnes and Noble's Nook.
Publishers, mourning the loss of valuable shelf space, said they hoped the bankruptcy filing would be a chance for the bookseller to reinvent itself. But they were also skeptical that the company's deep-rooted problems could be overcome. Borders told publishers on Wednesday that it was working on a long-term plan for its revival.
The company plans to reorganize and boost its online presence, but some analysts say it's too little, too late. We certainly hope they can pull off a successful comeback.