Borders Bankruptcy

By: Associated Press
By: Associated Press

Troubled bookstore chain Borders Group is reportedly discussing selling more than half its remaining stores as it works to reorganize under bankruptcy court protection.
The Wall Street Journal said late Friday that the bidder's identity could not be learned, and talks for the 225 stores are in an early stage and could fall through. The newspaper, citing unnamed people it said are familiar with the matter, said a "soft deadline" for potential bids passed last week.
Borders spokesman Mary Davis declined to comment on the report.
"We are focused on moving forward with the execution of our business plan," she said in an email. "We are continuing to evaluate interest in the company as expressed through the ongoing (Chapter 11) process."
The Journal also reported that Borders' much larger rival, Barnes & Noble Inc., recently offered to buy 10 stores plus the company's website and customer lists, but Borders was not interested. Barnes & Noble spokeswoman Mary Ellen Keating said, also by email, that she could neither confirm nor deny the report about her company's interest.
Ann Arbor, Mich.-based Borders filed for Chapter 11 bankruptcy protection in February and has closed hundreds of stores and taken more than $50 million in losses since then.
Borders had 642 stores before it entered bankruptcy court protection. It planned to close 228 of those by the end of May, leaving just more than 400 in operation.
Traditional book sellers face tough competition from online sellers and discounters. Borders has made several efforts to add new types of inventory, beef up its website and enter the digital market, but critics say they came too late to improve the company's prospects significantly.
The company is negotiating with publishers, which are among its largest creditors, and it hopes to emerge from bank protection by August or September, well ahead of a holiday shopping season that accounts for as much as 40 percent of annual revenue and profits for retailers.
Company leaders have said they hope to emerge a smaller and more profitable company, but speculation has been swirling that the company may not be able to reorganize as quickly as creditors would like and could be forced to liquidate.
Borders, which started with a single store in 1971, helped pioneer the book superstore concept along with Barnes & Noble.

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