Borders to file for bankruptcy – soon

The WSJ are now reporting that Borders are expected to file for bankruptcy early next week. Curiously enough, this article had a different headline and content yesterday, and it read something like "Bankruptcy Looms for Borders" (I didn't think to save a screen shot).

So Borders are dead. How is this news, exactly? Everyone knew this was the most likely outcome. After all, avoiding bankruptcy depended on Borders' unpaid suppliers agreeing to convert invoices into loan agreements. They _all_ had to agree to it, and that simply wasn't going to happen.

Actually, I'm getting ahead of myself. Bankruptcy does not mean they're dead, just that they need protection from their creditors. But do you expect them to exit bankruptcy protection without having been broken up and sold off for parts? I don't. I don't think they have a viable business.

via The WSJ

image via Flickr

About Nate Hoffelder (11586 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."

4 Comments on Borders to file for bankruptcy – soon

  1. Twenty year leases?
    Who did those people think they are? Professional sports teams?
    Who negotiated those things?
    Or were they negotiating themselves?
    Chapter 11 isn’t going to save them. Not with Billion-dollar liabilities, 10 cents in the bank, and geeration-long leases. Any two of the three they might recover from, but all three?
    Once, I would’ve really missed them.
    Now, I shrug…

  2. Borders is a perplexing company. When I was in the processing of actually buying books instead of downloading them, I would just wait until Borders had their 40% coupons. Every 3-4 weeks, they would send one out. I also had two cards so I could actually get two books if I wanted. In fact, all the books I bought as gifts this Christmas were either 33 or 40% off. How are you going to make money like that? Problem is, they have done it for so long, that people like me were use to it and I am sure non coupon weeks really sucked for them.

    The store in Fairfax, would often have long lines of people on the weekends, holding their discount coupons. It seems like a good idea but not if you do not make any money off of them. They are big stores to light up and heat (or ac).

    This year they entered the e reader market on what probably seemed like a coup. They had the inexpensive Kobo e reader. Amazon and Barnes and Noble went ahead and dropped the price on their e readers immediately. That stole most of the thunder from Borders. To add insult to injury, the first Kobo was a horrible unit. It had 8 shade grey scaling, no wifi, and was pitifully slow. For some reason, it had bluetooth built in that only worked with Blackberries????? With no wifi on it, the customers that did buy it, could buy their books anyplace and would probably gravitate to the Kobo bookstore rather than the Borders bookstore. Wifi (or 3G) is essential to get your customers hooked on your own bookstore.

    They released the Wifi Kobo too late and too high of a price. By that time, Kobo’s were known to suck. They also should have sold them at 99.99 or at 119.99 to even compete with the Kindle3 or Nook.

    Borders also decided to be the one stop shop for all e readers. In most of the stores I have been to, the e reader section is a shoddy section where ill informed salespeople really can not help you. Borders also went with the Micro Cruz reader and tablet, not knowing that these first generation android readers were going to be bad and most people do not want them. The Nook Color is such a better reader than any of these devices can ever hope to be. Also the display areas seem to be cluttered and not appealing. Plus they keep their store phones there too.

    One time I was looking at the e readers and the phone kept ringing and no one picked it up so I picked up the phone and said, “Thank you for calling the Sterling Borders, this is Sebastian, how can I help you?” The person was asking for directions to the store and I gave it to them. When I hung up the phone some little old lady said I should not be doing that. Oh well!

    I use to love Borders. Before my daughter moved in with me full time, I had nothing to do at nights and would hang out there all the time. I bought so many drinks there and read so many magazines for free. I figured they made far more money off the drinks than if I bought the magazines and went home with them. Borders use to have this huge music section with stations of headphones and cds to sample. I bought so many CDs there (all 33-40%0ff) just because i would not normally have listened to.

  3. 1. Bankruptcy was unavoidable. They have to shed a lot of store leases immediately, and there’s no reasonable alternative to bankruptcy for doing that.

    2. Even so, I don’t see a viable business, either. Borders was losing money before the economy went to heck, and before Kindle. Their “plans” for fixing the company sound suspiciously like “keep doing what we’ve been doing”. Borders management is truly clueless, and apparently blind to their own incompetence. But I think Borders is so far gone that not even a turn-around genius could save it now.

  4. Maybe they can run homeland security and get the borders of the US to close also!

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