Borders Liquidators Race Clock, Squeeze Cash From Doomed Stores

Businessweek: " ... The liquidators must sell as much as possible before their contract expires in order to maximize profit. Afterwards, their options are limited: They can sell stock to a non-retail customer, hang onto it and attempt to sell it later when liquidating other stores, or abandon it. They can’t sell to wholesalers or bulk purchasers who may return Borders stock to publishers, and thus Borders’s competitors. ... "

re: Borders UK meltdown

The Bookseller: "Waterstone's could be best placed to capitalise from a loss in market share by Borders, according to an influential retail analyst. In a wide-ranging note on entertainment retail, Paul Smiddy at HSBC said this week that between space re-allocation and store closures, Borders would lose market share over the next year, with Waterstone's in the best position to gain from this. ... "

Borders closing 28 additional stores, making final count 228

Reuters: "Borders Group Inc is set to close another 28 of its superstores on top of the 200 locations it is already shutting down as part of its reorganization under bankruptcy protection. Those locations will close by the end of April and include stores in Hollywood, California, and Stamford, Connecticut. The closings will leave Borders with only half of its superstores. 'We reached the determination about these stores after a further review of their ongoing economic viability,' Borders spokeswoman Mary Davis said in a statement. ... "

For Borders, a Scramble to be Lean

Trachtenberg/Spector, WSJ: "In a bid to boost to its digital prospects, [Borders President Mike] Edwards said Kobo Inc., the Toronto-based e-book retailer in which Borders holds a stake, will begin sharing some of the proceeds of every Kobo e-book sold in the U.S. The move, said Mr. Edwards, will enable Borders to more effectively compete on the digital front with companies such as Amazon.com Inc., Barnes & Noble Inc. and Apple Inc. In turn, Borders, Ann Arbor, Mich., will put all of its online and in-store marketing and promotional muscle behind the Kobo brand. Mr. Edwards said that in addition to selling Kobo e-readers, Borders also will continue to sell readers from other makers." This is still a death watch. The restructuring = chemotherapy, delaying the inevitable while also prolonging the agony.

Borders Meets with Publishers Over Terms; Conference Call Set

PW: "Ahead of a conference call set for Friday afternoon to give vendors an update on its business plan and restructuring, Borders merchandise executive have been in New York this week negotiating with publishers to resume direct shipments to the embattled chain. At present, Ingram is doing most of the shipping with publishers only shipping on a cash basis. According to sources, Borders is asking for cash in advance terms for a month with more regular terms afterwards."

Kobo Raises A New Round Of Funding

paidContent: " ... the Borders-backed e-books seller, has raised a new round of funding led by what the company says is a “major institutional investor.” Kobo doesn’t say who the investor is but does say that Canadian books retailer Indigo Books and Music, which spun off the company 15 months ago, participated in this funding round and remains its biggest shareholder. Borders, which put money in the company in December 2009 but filed for bankruptcy last month, isn’t listed as a participant in this funding round. ... "

Seven IT Lessons From The Borders Collapse

IDG : "We've all heard -- endlessly -- why Borders went bankrupt. But those things are just technology. What are the IT lessons? ... "

Publishers Look Beyond Bookstores

Coming to a bait and tackle shop near you. NY Times: " ... Publishers have stocked books in nonbook retailers for decades — a coffee-table book in the home department, a novelty book in Urban Outfitters. In the last year, though, some publishers have increased their efforts as the two largest bookstore chains have changed course. Barnes & Noble has been devoting more floor space for displays of e-readers, games and educational toys. Borders, after filing for bankruptcy protection in February, has begun liquidating some 200 of its superstores. ... "

Barnes & Noble 3Q net income falls

Yahoo! Finance: "NEW YORK (AP) -- Book seller Barnes & Noble's third-quarter revenue rose, but its net income fell 25 despite higher revenue as it continued to invest in its online operations and Nook e-readers, the company said Tuesday. Barnes & Noble also said it was suspending its quarterly dividend, and it doesn't plan to forecast its fourth-quarter or full-year earnings due to the effect of last week's bankruptcy filing by Borders Group."

Books Beyond Borders

Megan McArdle, The Atlantic: "At least Barnes and Noble should be happy; this erases their biggest competition for bricks-and-mortar pure brick retailing. But looking to the future, they too have to be nervous. All that real estate is expensive, and their margins are under pressure from Wal-Mart on the bricks-and-mortar side, and Amazon on the web. One wonders if the Nook can really make up for those competitive disadvantages."

Borders bankruptcy's impact across the industry

PW: "The trickle-down impact will affect everyone from manufacturers to agents. Borders accounted for about 8% of overall industry sales, a higher percentage in some categories. A downsized Borders means publishers are likely to receive smaller orders and in turn place smaller first printings, resulting in less business for printers. The likelihood of lower print sales, one publisher said, means that books acquired one or two years ago when Borders was much bigger will have a more difficult time earning the advance back and that less shelf space could mean lower advances."

GOB Banners To Go Up Friday for 200 Borders Stores

PW: "At Thursday morning’s hearing for Borders’ bankruptcy, Chief Judge Arthur Gonzalez of U.S. District Court, Southern District of N.Y., gave the retailer the go ahead to liquidate 200 stores and begin going-out-of-business sales on Friday rather than hold off for the customary 21-day waiting period. ... "

S&P Analyst: US Market "Over-Saturated" in Terms of Number of Retail Book Stores

NYTimes.com: "'The book retailing industry is very challenging right now,' said Michael Souers, an analyst for Standard & Poor’s. 'We’ve had significant transformation. Bookstores have gradually been losing their prominence, and the U.S. market is over-saturated in terms of the number of retail stores. So that trend will likely continue as e-books gain more prevalence in the market.' ... "

Kobo Reassures Its E-Book Customers After Borders Declares Bankruptcy

NYTimes: "Kobo readers join Borders customers today in asking, 'What's next?' And Kobo has responded with a blog post, reassuring users that its service - and their digital purchases - will remain intact. What does Borders' bankruptcy mean for Kobo customers? 'Nothing,' says Kobo, stating its independence from Borders and its financial security. ... "

Bankruptcy Filing Means Borders Owes Big Publishers Millions

Trachtenberg, WSJ: "'If publishers are lucky, they'll get back 25 cents on the dollar,' said Jed Lyons, chief executive of Rowman & Littlefield Publishing Group Inc., which publishes its own titles and distributes books for other publishers through its National Book Network. According to Wednesday's filing, Borders owes National Book Network $2 million. Although many publishers scaled back deliveries to Borders in the past year as its finances worsened, the filing showed they were the bookseller's biggest unsecured creditors, with the six largest on the list owed a combined $182 million. In first place was Penguin Group (USA), a unit of Pearson PLC, which Borders owes $41.1 million, followed in close order by Lagardère SCA's Hachette Book Group and CBS Corp.'s Simon & Schuster Inc. ... "

With Borders decline, industry loses millions of square feet of shelf space (permanently)

Hillel Italie, AP: "Whether or not Borders survives closing some 200 stores, the 'superstore' boom of the past two decades has busted, authors and publishers face a market minus millions of square feet of physical shelf space and communities once crowded with booksellers may find themselves with none. ... "

And Here We Go: Borders Files for Bankruptcy

NYTimes: "Borders Group, the beleaguered bookseller, filed for bankruptcy protection on Wednesday after failing to secure agreements with publishers and other vendors about reorganizing its debt. The bookseller listed $1.29 billion in debt and $1.27 billion in assets in a filing in federal bankruptcy court in Manhattan. ... "

Borders demise signals end for chain bookstores

Retail Gazette (UK):

High street book shops are becoming increasingly rare, with many of the biggest names in the sector pushed into oblivion by buying online and the increasing popularity of reading devices such as the Amazon Kindle and the Apple iPad. ...

Just over a year ago Borders closed the doors of all of its UK stores, marking the start of a disastrous down-turn for the industry.

The next to go was British Bookshops which announced its move into administration in January, and more recently Waterstones closed of 11 stores in the UK and Ireland following disappointing December sales trading.

So the question is whether there is still space for a large chain bookstore on high streets around the world?

Consulting Director of Verdict Research Neil Saunders argures that because bookstores require an extensive amount of space in order to offer a wide selection of books, a combination of low sales and high rents can be lethal. ...

Borders' Bankruptcy, eBooks, and Evaporating Physical Shelf-Space

Jeff Trachtenberg and Paul Sonne, Wall Street Journal:

A bankruptcy filing by Borders Group Inc., which could come within days, will mean fewer places for consumers to buy books, which in turn is expected to speed the pace of online and e-book sales.

Borders has been putting the finishing touches on a store-closure program that could eliminate more than one-third of its 674 stores as part of a Chapter 11 restructuring, according to people familiar with the matter.

"Once physical shelf space is gone, it's gone forever," says Mark Coker, chief executive of Smashwords Inc., an e-book publishing and distribution platform based in Los Gatos, Calif. "If you remove books from our towns and villages and malls, there will be less opportunity for the serendipitous discovery of books. And that will make it tougher to sell books." ...

Borders Prepares Bankruptcy Filing

Mike Spector and Jeff Trachtenberg, WSJ:

Borders Group Inc. is in the final stages of preparing a bankruptcy filing after failing to persuade publishers and others to go along with a plan to refinance the troubled bookstore chain's debt.

The Ann Arbor, Mich., bookseller could file for Chapter 11 bankruptcy protection as soon as Monday or Tuesday, said people familiar with the matter, paving the way for the closure of about 200 stores and thousands of job losses.

The people cautioned the filing could be delayed a few days. But Borders has pivoted from focusing on refinancing efforts and is preparing bankruptcy papers and seeking financing agreements that would keep it afloat during the Chapter 11 reorganization process, those people said.

"There have been constant inquiries by reporters, and stories written, regarding whether Borders is considering a Chapter 11 filing," a Borders spokesman said. "Borders is not prepared at this time to report on the course of action it will pursue."

Borders initially plans to close about 200 of its 674 stores, the people said. Liquidators have been bidding for the right to run the store closures, with an option to close an additional 50 stores or so under similar terms, the people said. ...