As part of its bankruptcy proceedings filed this morning, Borders has announced that it will close some 200 stores nationwide — you can see if yours will be hit in this interactive map. Chicago has been particularly stripped, with half of their 30 stores set to close. According to documents, Borders has $1.29 billion in debt and $1.27 billion in assets; it hopes to boost the bottom line by closing these 200 stores which were losing $2 million a week for the company.
While facing the inevitable, the big question is whether the chain will be able to avoid complete liquidation; observers are skeptical. And past fatal flaws are being reexamined:
Nonetheless, Borders must boost its online sales and figure out a way to capitalize on e-books as soon as possible. The company is still haunted by a deal in which it outsourced its online sales to Amazon from 2001 to 2008 – a relationship now viewed as a potentially fatal mistake. By the time Borders launched its own website in 2008, Amazon was the market king. Cutting into Amazon’s sales will be extremely difficult. In the third quarter of 2010, online sales made up about 2.7 percent of Borders’ revenue. In other words, the impact of Borders’ online business on its sales performance is negligible.
While nearly 40 court documents are readily readable, here’s the main filing for those of you who want to play along at home.
This is a story that has struck close to home, a.k.a. Stately Beat Manor, as the Borders up the street from us will be among those closing. We certainly didn’t buy that many books — no need to — but it was a frequent browsing ground, and every Christmas we bought gifts there and on occasion had a cuppa joe while using free Wi-Fi for out of the house work. In other words, it was a part of our life. With the Borders closing, the odd strip mall it resides in — one of a scant handful of its kind in Manhattan — will soon house two giant empty stores. An Office Depot also closed about three years ago and has stood empty since, although a temporary Halloween shop opens every fall. The Borders store is huge…maybe a Barnes & Noble or (WE WISH) Trader Joe’s will move in or at least something to add to the neighborhood. Amazon is great but it doesn’t get you out of the house and talking to your neighbors.
[Illustration by Maggie Siegel-Berele]