With no buyer found, creditors unwilling to float more cash, and a $24.3 million loss posted in March, Borders is struggling to find a way out of its troubles, according to a story in the Detroit Free Press, which quotes numerous shadowy insiders. No one has stepped forward to buy the chain outright.
Barnes & Noble has been reported to have offered to buy 10 Borders stores, and other bids for other parts of the business have come in. But:
The lack of offers for the whole chain may spell the end for Ann Arbor-based Borders, founded 40 years ago as a single used bookstore in Michigan. The company filed for bankruptcy protection in February after losing sales to digital devices such as Amazon.com’s Kindle reader.
A story in PW paints a more uncertain picture:
Rumors of Borders selling a piece of its business are swirling this weekend just days after CEO Mike Edwards said in a letter to vendors that it had decided against selling the company, or parts of it, and was preparing to find a way to exit from Chapter 11 as a intact company. Reports from different sources said Borders has received interest in acquiring 225 of its superstores with Barnes & Noble interested in 10.
UPDATE: Today’s PW report is even more dire.
Frustrated publishers have refused to give normal trade terms to Borders, despite CEO Mike Edwards’s best efforts to woo them. Just as important in today’s call will be Borders’s April results and the figures from the store closing sales, which have not been broken out previously. Three months into Borders’s bankruptcy, there is growing concern among publishers that Borders will run out of money before it can emerge from Chapter 11. In addition to liquidity concerns, publishers are troubled by the fact that the retailer has still not released its reorganization plan, which could come in the next few weeks. If Borders’ April results are as bad as March, publishers’ support for the company could all but collapse.
Illo by Maggie Siegel-Berele.