18 Feb 2011 03:19:17
Borders said it planned to close around 30 percent of its over 640 stores in the United States as part of its Chapter 11 bankruptcy filing, which protects the company from its creditors while it reorganizes.
"Borders Group does not have the capital resources it needs to be a viable competitor and which are essential for it to move forward with its business strategy," Borders president Mike Edwards said in a statement.
"To position Borders to remedy this condition, Borders Group, with the authorization of its board of directors, has filed a petition for reorganization relief under Chapter 11," Edwards said.
Borders, which has a total of 6,100 full-time employees and 11,400 part-time employees, has lost millions of dollars in recent years as the book industry faces online competition and transitions from print to digital products.
The Ann Arbor, Michigan-based company reported a net loss of 168.2 million dollars in the first 11 months of its latest fiscal year.
In July, Borders launched an online electronic book store to challenge e-readers from Amazon, Apple, Barnes & Noble and Sony in the fast-growing market for digital books.
But the move was seen as coming too late by many industry analysts.
Edwards said Borders has received $505 million in financing commitments from GE Capital, Restructuring Finance.
"This financing should enable Borders to meet its obligations going forward so that our stores continue to be competitive for customers in terms of goods, services and the shopping experience," he said.
Edwards said the financing would give Borders "the time to reorganize in order to reposition itself to be a successful business for the long term."
"We are confident that, with the protection afforded under Chapter 11 and with the support of employees, publishers, suppliers and creditors, and the reading public, a successful reorganization can be achieved enabling Borders to emerge from the process as a stronger and more vibrant book seller," he said.
Borders is not the only traditional brick-and-mortar bookseller in trouble.
Last year, the money-losing number one US bookstore group, Barnes & Noble, indicated it was in discussions on a sale or other strategic options.
Billy Hulkower, senior technology analyst at the research firm Mintel, said recently that bookstores face a "trilogy of threats" -- online competition, e-books, and public libraries offering free books and digital content.
Mike Shatzkin, head of the consultancy Idea Logical Co. and organizer of the Digital Book World conference held in New York, said in a recent interview with AFP that the industry was going through "disruptive change."
"Borders Group does not have the capital resources it needs to be a viable competitor and which are essential for it to move forward with its business strategy," Borders president Mike Edwards said in a statement.
"To position Borders to remedy this condition, Borders Group, with the authorization of its board of directors, has filed a petition for reorganization relief under Chapter 11," Edwards said.
Borders, which has a total of 6,100 full-time employees and 11,400 part-time employees, has lost millions of dollars in recent years as the book industry faces online competition and transitions from print to digital products.
The Ann Arbor, Michigan-based company reported a net loss of 168.2 million dollars in the first 11 months of its latest fiscal year.
In July, Borders launched an online electronic book store to challenge e-readers from Amazon, Apple, Barnes & Noble and Sony in the fast-growing market for digital books.
But the move was seen as coming too late by many industry analysts.
Edwards said Borders has received $505 million in financing commitments from GE Capital, Restructuring Finance.
"This financing should enable Borders to meet its obligations going forward so that our stores continue to be competitive for customers in terms of goods, services and the shopping experience," he said.
Edwards said the financing would give Borders "the time to reorganize in order to reposition itself to be a successful business for the long term."
"We are confident that, with the protection afforded under Chapter 11 and with the support of employees, publishers, suppliers and creditors, and the reading public, a successful reorganization can be achieved enabling Borders to emerge from the process as a stronger and more vibrant book seller," he said.
Borders is not the only traditional brick-and-mortar bookseller in trouble.
Last year, the money-losing number one US bookstore group, Barnes & Noble, indicated it was in discussions on a sale or other strategic options.
Billy Hulkower, senior technology analyst at the research firm Mintel, said recently that bookstores face a "trilogy of threats" -- online competition, e-books, and public libraries offering free books and digital content.
Mike Shatzkin, head of the consultancy Idea Logical Co. and organizer of the Digital Book World conference held in New York, said in a recent interview with AFP that the industry was going through "disruptive change."
