Borders files bankruptcy

Borders files bankruptcy as it struggles to respond to changes in book market
By Michael S. Rosenwald
Washington Post Staff Writer
Wednesday, February 16, 2011; 2:20 PM

The story of Borders Group has apparently reached its climax.

The iconic bookstore chain, founded in 1971 by brothers Tom and Louis Borders, filed for Chapter 11 bankruptcy reorganization Wednesday morning, weighed down by more than $1 billion debt and unable to navigate rapid changes in consumer behavior.

In: E-books downloaded whenever, wherever. Out: People buying books in Borders stores.

The Ann Arbor, Mich., company said in court filings that it will close about 30 percent of its more than 600 stores, including several in the Washington region. Thousands of employees will lose their jobs.

The local closures are expected to include some of the chain's most popular area outlets: at White Flint Mall, on Rockville Pike in Montgomery County; on Wisconsin Avenue in Friendship Heights; and at 18th and L streets NW in downtown Washington. Virginia stores in Vienna and Winchester are also expected to close, as are Maryland locations in Bowie and Largo.

"This is the biggest bankruptcy in the history of the book business," said Albert Greco, senior researcher at the Institute for Publishing Research. "This is really a depressing day."

Borders has asked a bankruptcy judge in New York to let it begin liquidating inventory at stores this weekend, noting in court filings that the Presidents' Day holiday would bring high foot traffic. In liquidations of stores it closed last year, Borders sold everything under the roofs, even bookshelves and cleaning supplies.

Across the region Wednesday, shoppers at Borders and store owners nearby expressed shock at just how far the chain had fallen. Bert Oser, the owner of pen store Bertram's Inkwell at the White Flint Mall, said Borders had been packed over the Christmas holiday and that he had been wondering whether the location would pull through.
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"I'm really sorry to see them go," Oser said.

At the Borders on 18th and L in the District, shopper Kevin Marrion said it never crossed his mind that such a prime location would close.

"I work in this building," he said. "I come here every day for coffee and to take a break. I walk around and buy books, magazines, random things to read. I never thought this would close. It's high traffic. I've been coming here for so many years."

Borders' problems have been mounting for years.

Analysts say it made numerous mistakes: outsourcing its e-book business to arch-competitor Amazon.com for years; a costly overseas expansion; and an expensive stock buyback program that rewarded shareholders but left the company low on cash as changes in book buying behavior mounted.

"This is a company that crashed well before it crashed," Greco said. "You could see this coming for a long time."

Supernova wrote:I never heard of Borders but that's sad.


And, it may sound like a career suicide but that's why if I ever get published, I'm staying as far away from the e-reader business as possible, I got no use for them and I don't appreciate them taking business away from good places like that.

Rockbird wrote:It's not that people are only buying e-books. It's that Borders has horrendous prices. It's like when Virgin when under.

alissain wrote:Do you all really think e-books will replace book stores? I don't know...alot of people like to go to book stores just to relax, read, drink coffee, hang out. Not everyone is going to buy a Kindle, Nook, etc. I know its discouraging to see bookstores close but I seriously doubt they will be wiped out. Not everyone likes the new e-readers.