The troubled Ann Arbor, Mich., bookseller could file for Chapter 11 bankruptcy-protection as soon as Monday or Tuesday, paving the way for hundreds of store closings and thousands of job losses, said people familiar with the matter.
Borders has abandoned efforts to refinance its debts, and is preparing bankruptcy papers and seeking financing agreements that would keep it operating during the Chapter 11 restructuring process, the people said. Its shares tumbled 33% to 25 cents apiece in 4 p.m. New York Stock Exchange trading after The Wall Street Journal reported its plans.
According to the Wall Street Journal, the filing would allow for stores to continue to operate during bankruptcy proceedings, but the company would close a third of its stores and lay off a significant number of its 19,500 employees. Observers are skeptical that the chain can reinvent itself, however, and are throwing around the “L” word: liquidation.
While the article blames declining interest in physical bookstores in the face of Amazon and digital books, it’s important to remember that Borders has made a lot of business mistakes on the way to this sad state of affairs.