April 22, 2011

Borders needs more money or it's going to really go bankrupt

by

Although the Borders Group has yet to present a plan for staying in business to its bankruptcy judge — it’s already been given a delay — the plan the company presented to GE Capital that got them half a billion dollars to finance their bankruptcy reorganization appears to have been a bad plan. Or at least, according to a Bloomberg News wire story, which last night reported the company “is seeking at least $50 million in additional financing as sales trail expectations and publishers demand cash in advance ….”

Sourced to “two people who have seen the chain’s plans to reorganize,” the story says Borders needs the money to “emerge from its in-court restructuring.” Otherwise, “The retailer may risk liquidation without further investment, easier terms from vendors or a buyer.”

Meanwhile, other anonymous insiders say that “Some publishers are spurning the reorganization the chain proposed to them privately … At least one deems the revenue projections unrealistic because Borders no longer has enough stores to generate those sales ….”

Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.

  • Joe

    The company could be sold for 50 million.

    “Some publishers are spurning the reorganization the chain proposed to them privately … At least one deems the revenue projections unrealistic because Borders no longer has enough stores to generate those sales ….”

  • Joe

    The company could be sold for 50 million.

    “Some publishers are spurning the reorganization the chain proposed to them privately … At least one deems the revenue projections unrealistic because Borders no longer has enough stores to generate those sales ….”

  • http://twitter.com/38enso Jack W Perry

    A what point do people realize the Borders ship is sunk and not worth throwing more money at them. The growth areas of book-selling — online and eBooks — Borders has no strategy. They are strangled by years of horrible leases and now can’t close these stores fast enough. What will be left worth saving?

    I guess at least the executives will get their millions of dollars…

  • http://twitter.com/38enso Jack W Perry

    A what point do people realize the Borders ship is sunk and not worth throwing more money at them. The growth areas of book-selling — online and eBooks — Borders has no strategy. They are strangled by years of horrible leases and now can’t close these stores fast enough. What will be left worth saving?

    I guess at least the executives will get their millions of dollars…

  • Daniel

    Like more than a few patrons, I have a love/hate relationship with what was once the mighty Walmart of bookstores. Being a car-less hater of public transportation, I secretly applauded the opening of the Borders on the busy avenue of St. Charles down here in New Orleans a few years ago. It seemed that the post-Katrina (Pre-BP) city was finally regaining its footing. Now, with the three-year old Borders’ closing, it seems that the executives have generously decided to give the local bookstores here a break by closing up shop.

    But it would seem that all is not lost for my favorite place to kill a Sunday. I was recently in Massachusetts where I visited a total of three Borders–all of which claim to be staying open. Whether or not there will be out-of-business sales in a few weeks remains to be seen, but at least there is a glimmer of hope for the Northeast.

    For residents of New Orleans, there will always be Amazon to steal business from the locals.

  • Daniel

    Like more than a few patrons, I have a love/hate relationship with what was once the mighty Walmart of bookstores. Being a car-less hater of public transportation, I secretly applauded the opening of the Borders on the busy avenue of St. Charles down here in New Orleans a few years ago. It seemed that the post-Katrina (Pre-BP) city was finally regaining its footing. Now, with the three-year old Borders’ closing, it seems that the executives have generously decided to give the local bookstores here a break by closing up shop.

    But it would seem that all is not lost for my favorite place to kill a Sunday. I was recently in Massachusetts where I visited a total of three Borders–all of which claim to be staying open. Whether or not there will be out-of-business sales in a few weeks remains to be seen, but at least there is a glimmer of hope for the Northeast.

    For residents of New Orleans, there will always be Amazon to steal business from the locals.

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