Borders on the brink, but Houston stores are saved
After filing for Chapter 11 protection on Wednesday, big box bookseller Borders Group Inc. confirmed that it will be closing about 30 percent of its stores nationwide. The list has been revealed, and Houstonians can read easy knowing that their beloved Borders will remain intact.
While Houston's storefronts are staying put, three locations in Austin will be shuttering their doors. Dallas-area bookworms will also suffer the loss of seven Borders, all part of the 200-plus store closures across the nation. The Wall Street Journal reports that the unprofitable storefronts were belaboring Borders with about $2 million a week in losses.
Borders' demise has been attributed to its lack of savvy in keeping up with digital trends, such as its regrettable six years of outsourcing e-business to Amazon and failure to launch an e-reader. In December and January, Borders defaulted on payments to publishers and landowners. To get out of their analog age financial woes, the Ann Arbor, Mich.-based company will be restructured with the aid of $505 million in debtor-in-possession financing.
Borders has stated that rewards programs, gift cards and coupons will continue to be honored during the bankruptcy process, although unpaid publishers, such as Ingram Book Group, have begun to suspend shipments of their books. One of Borders' biggest equity holders, William A. Ackman of Pershing Square Capital, is seeking a merger with Barnes & Noble if Borders is capable of closing enough stores to restore financial viability, according to the New York Times.