If you have any Borders gift cards laying around, now would be a good time to spend them.
I just got off the phone with a Borders PR rep. She read me the official statement about Borders’ current financial crisis. I’m going to quote it in its entirety because this one is scary. If I were a Borders vendor this statement would probably give me a panic attack. (Please pardon the transcription errors.)
In response to media inquiries, Borders Group Inc. today stated that, as the company previously reported, it is in discussions regarding the potential refinancing of its existing senior credit facilities. As part of this potential refinancing, Borders has determined that it is necessary to restructure its vendor financing arrangements and is delaying payments to certain of its vendors.
Borders has notified these vendors and will be working with them to restructure their arrangements with the company. Borders stated that there can be no assurance that it will be successful in refinancing its senior credit facilities or restructuring its vendor financing arrangements. As the company previously reported, the absence of the refinancing could cause the company to violate the terms of its existing credit agreements in the first calendar quarter of 2011 and the company could experience a liquidity shortfall.
I’m sorry, but if you’re not paying vendors and you’re worried about making loan payments then you’re experiencing a liquidity shortfall right now.