Borders won’t be paying their landlords this month

First Borders stopped payments in late December, and now they're stopping payments in late January. This is truly the beginning of the end.In case you're wondering, no I'm not enjoying the coming demise of Borders. This is going to leave a large swath of the country without a large bookstore. That is a very bad thing.From the press release:

Borders Group, Inc. (NYSE: BGP) today reported that it will delay payments to certain parties -- vendors, landlords and others -- scheduled for the end of January. The delay is intended to help the company maintain liquidity while it seeks to complete a refinancing or restructuring of its existing credit facilities and other obligations. Borders has received a conditional commitment from GE Capital, Restructuring Finance for a $550 million senior secured credit facility.

Borders emphasized that it understands the impact of its decision on the affected parties, but that the company is committed to working with its vendors and other business partners to achieve an outcome that is in the best interest of Borders and these parties for the long-term.

About Nate Hoffelder (11223 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

7 Comments on Borders won’t be paying their landlords this month

  1. They claim they’re doing all this to stay out of bankruptcy.
    Thing is, as far as their creditors go, what they’re doing looks a whole lot like chapter 11…

  2. It also wounds Kobo very badly. No more access to Gift Cards for buying eBooks via Borders. This means Kobo becomes like B&N: You need a credit card to buy. Leaves people like me at the mercy of Sony. Gaaaaah!

  3. Nate, I was somewhat amused by your comment: “In case you’re wondering, no I’m not enjoying the coming demise of Borders. This is going to leave a large swath of the country without a large bookstore. That is a very bad thing.”

    I agree it is a bad thing but I not only agree, I try to do something about it: I don’t shop at Amazon for books. Borders, B&N, Chapters, Books-a-Million, Powells, Tattered Cover, and all of the other bricks-and-mortar bookstores can only survive if people shop there.

    I suppose the response to your comment would be, “well, these places won’t have a physical bookstore but they will have virtual bookstores.”

  4. Although many would like it otherwise, times change and markets evolve. Borders has only themselves to blame for the fix they’re in. Others are weathering the market reset well enough, so far.
    If Borders goes under and *if* there really is a sufficient market for big B&M storefronts in the print book industry, new players will pop in or existing players will fill the void.

    My take is that there *isn’t* a market for print book superstores. That the optimum format is the old B. Dalton/WaldenBooks mall store format that Borders management, in their oh-so finite “wisdom” liquidated in their attempt to drive buyers to their superstores. Books are, as a whole, a commodity these days. Odds are the optimum sales approach is small and ubiquitous; like Radio Shack or Gamestop or Payless Shoes.
    Gamestop, in particular, operates in an industry much like books and one where online sales and digital downloads are making inroads but they’re finding ways to survive.
    Borders, more than B&N had the wherewithal to adapt to the new “mammalian” age of B&M book retailing but they chose to kill the agile distributed sales channels in favor of the hulking dinosaur superstores.
    They zigged while the market zagged.
    Don’t expect many consumers to sacrifice their pocketbook to preserve the dying dinosaur.
    It’s not going to happen.

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