BORDERS

Economy
8:38 am
Wed April 6, 2011

Report: Borders to leave Ann Arbor for Metro Detroit

A report in the Wall Street Journal says Borders will move its headquarters from Ann Arbor, MI to Metro Detroit
Lorna Is Flickr

The Wall Street Journal is reporting that Borders Group Inc. will move its headquarters from Ann Arbor to the Detroit metro area. The company is currently operating under Chapter 11 bankruptcy. From the Journal:

Borders Group Inc. plans to tell publishers and landlords Wednesday it has achieved major cost savings, including more than $30 million in rent reductions, and that it will move out of its Ann Arbor, Mich., headquarters for cheaper office space in the greater Detroit metro area.

Presenting its business plan to an unsecured creditors committee, predominantly made up of publishers and landlords, Borders also plans to say it has now closed about 50 superstores as part of efforts to emerge from Chapter 11 bankruptcy, according to people familiar with the matter. Altogether, Borders will close 226 by the end of next month, although a handful of additional stores could be closed, depending on negotiations with landlords, the people said.

News organizations around the state were quick to pick up the report:

Economy
4:45 pm
Tue March 15, 2011

Borders will get more time to review bookstore leases

Borders bookstore located in Arborland shopping center in Ann Arbor, Michigan
(photo by Steve Carmody/Michigan Radio)

A federal bankruptcy judge has decided to give Borders Group another 90 days to review leases for its bookstores.   The Ann Arbor-based bookstore change is working to emerge from bankruptcy later this year. Borders is already closing 200 bookstores across the country, including 4 stores in Michigan.   Borders is expected to announce plans to close additional stores and renegotiate leases on about 600 other outlets. 

Read more
Arts/Culture
12:28 pm
Fri February 25, 2011

Borders No. 1, where it all began in Ann Arbor

Borders Books has filed for bankruptcy. One former employee remembers the first store in Ann Arbor.
Steve Carmody Michigan Radio

Borders Books started in Ann Arbor as a small independent book store.

Tom and Louis Borders opened it in Ann Arbor, Michigan in 1971.

The first Borders bookstore was located at 209 State Street, north of the State Theater.

Eve Silberman was a graduate student in Ann Arbor when she got a job at the very first Borders Bookstore owned by the Borders brothers.

The company recently declared bankruptcy.

Silberman sat down to talk with public radio host Dick Gordon of The Story.

Silberman talked with Gordon about her memories of working at the first Borders bookstore (she described herself as "not a very good worker").

She recalled several things about the first Borders Bookstore:

  • Joe Gable was the "shaper and caretaker" of the store (many thought Gable was a Borders).
  • Gable saw the store as a "cathedral of books" and the workers were the "worshippers."
  • Classical music played in the store.
  • Potential employees had to take a test to get a job at the store.
  • The store carried unique titles.
  • The store's cash register was complex at the time.

Host Dick Gordon asked Silberman about the sense in Ann Arbor about the misfortunes of Borders.

Read more
Economy
4:52 pm
Fri February 18, 2011

Borders Books liquidation sale begins Saturday at closing stores

A look inside a Borders Bookstore
(photo by Steve Carmody/Michigan Radio)

The company handling the liquidation sales at some 200 Borders Books stores announced today the sales will begin Saturday.   Hilco Merchant Resources of Chicago issued a press release saying the liquidation will begin with 20 to 40% on all merchandize with some exceptions. Over $350 million of inventory including books, magazines, music and movie media, calendars, posters and more will be liquidated.  

Read more
Economy
9:12 am
Thu February 17, 2011

Borders: What's Next?

Books sit on the shelf in a Borders bookstore
(photo by Steve Carmody/Michigan Radio)

Borders Books’ successful trip through bankruptcy is contingent on deals with publishers.    Borders filed for bankruptcy protection Wednesday. 

Court documents show the Ann Arbor-based bookseller owes more than $150 million to 7 publishers, including Simon & Shuster, Random House and Penguin.    Borders has also been delaying payments to publishers since December. 

Read more
Auto/Economy
8:30 pm
Wed February 16, 2011

Libraries feel strain of more readers, fewer resources

Detroit Public Library
Detroit Public Library

People losing their local Borders bookstore may turn to their local library for books and DVD’s. But that may put an even bigger strain on Michigan’s already-struggling libraries.

Libraries face a tough paradox.  People tend to use them more when the economy is bad. But a bad economy also means they get fewer resources to work with.

Read more
Economy
4:40 pm
Wed February 16, 2011

Borders files for bankruptcy

Borders Books

Update 4:37 p.m.

Independent bookstores are waiting to see what kind of impact Borders’ bankruptcy will have on business. Michigan Radio's Jennifer Guerra spoke with Nicola Rooney, owner Nicola’s Books in Ann Arbor.

Rooney expects business to pick up at her store now that one of the Borders in Ann Arbor is slated to close. She said Borders’ financial problems are not emblematic of the book business in general:

"No, it’s not the death knell of bookstores by any means. They did a lot of things wrong over the years…and at any time there were things they could have done differently that they did not, and this of course from someone who knows maybe two percent of what was really going on inside, because you never know the real story," said Rooney.

Rooney blames Borders's problems on its poor website strategy, and frequent management changes.

Update 12:07 p.m.

Michigan Radio's Jennifer Guerra reports that of the stores slated for closing so far, four are in Michigan:

  • Dearborn
  • Utica
  • Grosse Pointe
  • Ann Arbor - the Arborland location.

Guerra spoke with Ann Arbor resident Jack Love about the bankruptcy:

"I’m sad. They’re nice places to go, pick up a book, look through it, of course Borders has more than just books: coffee, book readings, public gatherings," said Love.

Guerra says Love partly blames himself for Borders’ financial problems - he’s a book fiend who buys most of his books online at Amazon.

Update 11:58 a.m.

The Wall Street Journal's Law Blog has posted a list of the top Borders creditors - Who's Owed What in Borders' Bankruptcy.

Not surprisingly, book publishers top the list. Penguin Putnam Inc. is at the very top. They're owed $41,118,914.

Update 11:33 a.m.

Michigan Radio's Steve Carmody just spoke with Rob James, the president of EXP Realty Advisors. EXP specializes in real estate valuations for companies in bankruptcy.  James told Carmody that "no doubt about it" the Borders store closings will have a ripple effect in the retail industry:

"It's going to put a lot of strain on the shopping center industry and its going to hurt a lot of landlords," said James.

Update 11:07

Here is the list of stores Borders plans to close

Update 11:00 a.m.:

The company has released a list of stores it plans to close. We'll have that list posted shortly.

The Wall Street Journal reports the company has secured a loan that will keep the company going while it goes through bankruptcy reorganization. From the WSJ:

The Ann Arbor, Mich., company also said it has lined up a $505 million loan from GE Capital to fund its operations while in bankruptcy. Access to such a loan is subject to court approval.

In its bankruptcy petition, Borders listed assets of $1.28 billion and liabilities of $1.29 billion as of Dec. 25.

Borders' five largest unsecured creditors are the book publishers Penguin Putnam Inc., Hachette Book Group, Simon & Schuster Inc., Random House and Harper Collins Publishers.

AnnArbor.com has some extensive coverage of the bookseller's bankruptcy filing, including a live blog. Nathan Bomey of AnnArbor.com reports on some of the scenarios that could unfold during the bankruptcy reorganization. They also highlight some of the missteps in Borders history. From AnnArbor.com:

Among the company's biggest mistakes was allowing Amazon to manage its online sales from 2001 to 2008.

“They never really harnessed the power of the Internet,” said David Dykhouse, a manager of Borders’ Arborland store from 2002 to 2007. “As someone once said, the Internet is the comet that killed the dinosaur. I’m afraid Borders is one of those dinosaurs.

8:09 a.m.

Borders Group is filing for Chapter 11 bankruptcy reorganization after a long struggle to stay afloat. Borders had a difficult time keeping up as the book and music businesses changed beneath its feet.

The 40-year-old Ann Arbor company plans to close about 30 percent of its stores, or about 200, over the next few weeks. The company will receive $505 million dollars in so-called debtor-in-possession financing from GE Capital and others to help it reorganize.

Borders has recently delayed payments to its vendors, landlords and other creditors. Big-box bookstores have struggled as more people buy books online, in electronic form or at grocery stores or discounters such as Walmart.

Read more
Economy
1:56 pm
Tue February 15, 2011

Could a Borders bankruptcy be a boom for independent bookstores?

A customer buys a book at a Borders bookstore in Ann Arbor
(photo by Steve Carmody/Michigan Radio)

Independent bookstore owners are not sure whether Borders Books expected bankruptcy filing this week will be good news for their businesses. 

Analysts expect Borders will close 200 or more stores as part of any bankruptcy plan.  

When Borders Books and other mega-bookstore chains started opening 40 years ago, it seemed like the end for many small local bookstores.   They found it difficult to compete with the big stores with their wider selections, coffee bars and other amenities. But the obituary for the corner bookstore was a bit premature.  

Now that online book sales and e-book readers are shrinking the market for big-box bookstores,  the smaller footprint booksellers suddenly have a brighter future. Deb Leonard is the executive director of the Great Lakes Independent Bookseller Association

“Those independent stores in those neighborhoods will benefit because people need a place to go.”

Leonard says, in some cases, local bookstores might consider taking over former Borders locations.

Economy
11:23 am
Tue February 15, 2011

The 2 types of bankruptcy facing Borders

Borders Group Inc. is facing bankruptcy
user brewbooks creative commons

With the impending bankruptcy of Borders Group Inc., we thought we'd give you a quick explanation of the two types of options facing the company.

Chapter 7 Bankruptcy

Also known as "liquidation" or "straight bankruptcy." It sparks an 'everything must go' sale of the company's assets. The company may cease operations after filing Chapter 7 bankruptcy.

The company that owes the money files for Chapter 7 bankruptcy in court. The company's assets are turned over to a bankruptcy trustee who then sells the assets and tries to pay back the company's creditors. In exchange, the company that owes the money is freed from having to pay all of its bills in full (unless some wrongdoing is found).

The details of Chapter 7 rules vary from state to state.

Chapter 11 Bankruptcy

Also known as "reorganization" bankruptcy used by many corporations (like K-Mart and General Motors).

After filing for Chapter 11 bankruptcy, the company that owes money typically keeps running its business and keeps its assets while going through a reorganization process overseen by the court.

A reorganization plan is put forth, and if the majority of creditors accept it, and the court accepts the plan - the company continues operating and repays its creditors under the reorganization plan.

Payment to creditors can come from the sale of assets, repayment from future profits, or from mergers or recapitalization.

News Roundup
9:03 am
Tue February 15, 2011

In this morning's news...

The end of Borders

Borders Book Group Inc. can't pay its bills.

Several reports say the company is expected to file for bankruptcy sometime this week. From Reuters:

Bookseller Borders Group Inc is reviewing bids from liquidators to close hundreds of stores as it works out the final details of its impending bankruptcy filing, according to people close to the talks. The review is part of its plan to close about 200 of its 650 stores, which are a mix of Borders superstores and smaller Waldenbooks shops, these people said. The store closings will remove weak stores that have bled the retail chain's cash in recent years and provide immediate funds from the sale of inventory.

A Border's spokesman is quoted in the report saying, "Borders will not comment or speculate upon Borders' future course. If and when the company has something to disclose, it will do so."

President's Obama's Budget proposal and Michigan

President Obama released his budget proposal to Congress yesterday saying "Even as we cut out things that we can afford to do without, we have a responsibility to invest in those areas that will have the biggest impact in our future."

The Detroit Free Press says the President's budget is a "mixed bag" for Michigan. On the up side, the budget continues to invest in advanced vehicle technology research, it asks that a $7,500 rebate be put in place to encourage electric vehicle purchases (instead of a tax credit), and it would help the state avoid a big payment it owes the federal government for borrowing money to cover unemployment benefits.

And the down side? From the Freep: 

...it cuts in half a program to help poor people pay energy bills, cuts community block grants and Great Lakes restoration funding and ends plans to build an amphibious Marine Corps vehicle that could have created hundreds of Michigan jobs. 

A big day for Flint

The city of Flint will likely find out today whether it can go to the bond market to cover it's $17 million budget deficit.

The State Administrative Board is meeting today at 11 a.m. to decide the city's fate.

If the plan is not approved, the State of Michigan may eventually have to take over the city's finances.

City Administrator Greg Eason told WJRT

"This stabilization bond is critical to the survival of the city over the next three to five years."

Economy
9:51 am
Mon February 14, 2011

Next chapter or Final chapter for Borders

Books sit on the shelf in a Borders bookstore
(Steve Carmody/Michigan Radio)

Borders Books is expected to begin its next chapter this week. The Ann Arbor based bookseller is expected to file for bankruptcy protection Monday or Tuesday. 

On Friday, the Wall Street Journal reported Borders will likely file for bankruptcy protection this week. Borders stock fell by a third on the news.

It’s not like the news was unexpected. Borders has been struggling financially for years. Less than a year ago,  investors were paying more than $3 for a share of Borders stock. When the market closed Friday, you could have bought a share of Borders Books for 25 cents.

Borders is still the nation’s number 2 traditional bookstore with more than 600 stores. But as book buyers have spent more online, Borders’ share of the total book market has shrunk.

It’s been delaying payments to publishers and others since December, as the company has tried to hang on to some cash. Borders’ bankruptcy plan reportedly includes closing more than 200 stores. 

No word on what the plan is to convince book buyers to return to Borders.

The Rise and Fall (and Re-Rise?) of Borders Group.

Economy
2:46 pm
Fri February 11, 2011

Borders Books may file for bankruptcy Monday

The Wall Street Journal is reporting that Borders Group may file for bankruptcy protection on Monday or Tuesday next week. The Ann Arbor-based bookseller has struggled in recent years as book buyers have migrated from big box stores to the web.

Read more
Economy
11:07 am
Mon February 7, 2011

Borders Books "One foot in the grave and one foot on a banana peel"

A big week for Borders
Ruthanne Reid Flickr

This could be a pivotal week for the future of Borders Books with some sources saying the company could seek bankruptcy protection.    

The Ann Arbor-based bookseller delayed payments to publishers and others the past two months.   The company has been trying to negotiate with its vendors and come up with a plan to move forward.    Borders has a half billion dollar financing deal in place, if it can come to terms with its vendors. 

Jeff Manning is a managing director with BDO Capitol Advisors.   Manning’s company closely follows the retail market. 

"The challenge,  if you look at the statistics,  majority of companies that enter bankruptcy do not emerge.  If you look at recent statistics with retailers, an awful lot of retailers have gone straight into liquidation." 

Manning expects Borders’ vendors will decide it’s more in their interest to keep Borders viable. He says, if Borders does file for bankruptcy, the company will probably exit bankruptcy before Christmas.   But Manning says Borders execs must be careful, since the bookseller is in a precarious position:

"One foot in the grave and one foot on a banana peel," says Manning.

 

The Rise and Fall (and Re-Rise?) of Borders Group.

Economy
10:31 pm
Sun January 30, 2011

More problems at Borders Books

Ann Arbor-based Borders Books announced Sunday that it would be delaying January payments to its landlords, vendors and others. Borders also delayed payments in December.  

Borders says the move is intended to ‘protect liquidity’. Borders has been losing money for years, as book buyers have increasingly turned to the internet.

Michael Norris is the senior trade book analyst with Simba Information. He says there is one problem Borders executives must find a solution for. 

They need to answer the question 'Why should I shop at Borders? They should tattoo that question backward on their forehead so they can see every time they look into the mirror every morning.

Borders lined up a half billion dollars in financing last week to help the book seller stay afloat. But the company may still be headed toward bankruptcy protection

Economy
12:42 pm
Fri January 28, 2011

Books without Borders? Authors ponder future of bookselling

Ann Arbor-based Borders Books may be able to stave off bankruptcy, thanks to a new financing deal announced this week .     Professional writers are waiting to see what the company’s next chapter will bring. 

Read more
Economy
9:00 am
Fri January 28, 2011

Borders Books gets lifeline (but will it be enough?)

Courtesy Creative Commons

Borders Books has been struggling to survive. 

Yesterday, the Ann Arbor bookseller announced it had lined up $550 million dollars in financing to stay afloat.

The deal is contingent on Borders reaching a deal with book publishers. It's been reported that the company set a February 1st deadline for the publishers to agree to take up to a third of the booksellers debt. A Borders spokeswoman would only say the company has not stated a specific date. 

The deal with GE Capital announced Thursday could help. Or it may not. The Wall Street Journal is reporting that Borders is still looking for money to finance the company through a possible bankruptcy filing.

Economy
11:08 am
Fri January 14, 2011

Report: Borders close to financing deal

Borders has been on the brink. The company has been trying to secure financing to stave off bankruptcy.
Flickr - Ruthanne Reid

The headlines for the Michigan-based Borders Group Inc. have not been good lately:

And my personal favorite speculative headline:

It seems everyone has been on a death watch for the bookseller.

Today, Julie Bosman writes in the New York Times Borders may be close to a financing deal that might help the company reorganize. From the article:

Borders executives told publishers that they were close to securing refinancing from GE Capital and other lenders, these people said, speaking only on condition of anonymity, and that the company intended to reduce costs, improve liquidity and expand marketing efforts, as well as sell some assets.

Earlier this month, we  posted on a Reuters report that said Borders was working with publishers to work out a deal. Borders is in debt to the publishers for past shipments and the company reportedly wants to restructure that debt as a loan.

Meanwhile, the company is cutting costs. The Detroit News reported yesterday that Borders is closing a big distribution center in Tennessee:

Borders will consolidate the processing and delivery of books, movies, music and other products to two distribution centers in Carlisle, Pa., and Mira Loma, Calif. It is part of a long-term effort to cut costs and make the distribution of products to bookstores more efficient, Borders Group said in a statement.

So will borders survive? What would your future headline say?

Economy
11:33 am
Thu January 6, 2011

Is Borders Group Inc. headed for bankruptcy?

Paying rent is just one of the problems for Borders Group.
flickr - brewbooks

Sales at Borders Book stores have been slipping for several years as more buyers go to places like Amazon.com to find their titles, and as more people move into the digital reader market. Last month, the company reported that its third quarter sales were down 17.6% from the same period a year ago.

So the company is struggling to find a way to pay its bills. One way it's trying to preserve cash is to suspend its payments to publishers.

Read more
BUSINESS
4:26 pm
Thu December 9, 2010

Borders Books posts big 3rd quarter loss

Even the fixtures within the new Borders Concept Store in Ann Arbor, Mich. have been redesigned to encourage customer exploration. Curved tables in the front of the store allow customers to move easily through the selection of spotlighted books.
(courtesy of Borders Group/photo credit: Laszlo Regos)

Borders Books reported the company lost $74 million dollars in the 3rd quarter. That's about twice as much as Borders lost in the 3rd quarter of 2009. The Ann Arbor based book seller continues to struggle in a competitive market.

In a written statement, Borders Group CEO Mike Edwards conceded his company's struggles:

BUSINESS
2:12 pm
Mon December 6, 2010

Borders buying Barnes & Noble? "Bonkers"

Border's shareholders making a quixotic move?
Ildar Sagdejev creative commons

Update: 2:12pm:

Since we posted this story we found this analysis piece by Sarah Weinman of Daily Finance News. She also calls the notion that Borders Books could buy Barnes & Noble a story that has "entertainment value" not much more. Weinman says of Borders Books:

"If a merger was its plan for saving itself, expect B&N's rejection of the deal to accelerate its downward spiral -- an end that, sadly for the publishing industry, is likely to come sooner rather than later."

Read more

Pages