Say bye bye to another bookstore….sigh. Borders Group Inc. may file for bankruptcy reorganization as early as Monday or Tuesday, according to a report in the Wall Street Journal. The No. 2 traditional bookstore in the U.S. also plans to close about 200 of its 674 stores and cut thousands of jobs. Read more after the jump…
(AP)–The story also says Borders is hearing pitches from Bank of America Corp. and General Electric Co.’s finance arm for $450 million in financing to keep operating under bankruptcy protection.
“There have been constant inquiries by reporters, and stories written, regarding whether Borders is considering a Chapter 11 filing,” said Borders spokeswoman Mary Davis. “Borders is not prepared at this time to report on the course of action it will pursue.”
GE Capital had no comment. Bank of America could not be immediately reached.
Borders has struggled with losses for years as it tries to adapt to a changing book industry. More people are buying books online, at discounters and other stores.
The company reported sales at its namesake superstores open at least a year were down 14.6 percent for the crucial holiday period this year.
Borders has also been playing catch-up in the rapidly growing e-book market. It entered into the electronic book market with Canada’s Kobo Inc. last year, but that announcement seemed belated after chief rival Barnes & Noble announced its own dedicated e-reader, the Nook, in 2009, and has invested heavily in a related online store. Amazon.com’s Kindle has dominated the e-reader market.
Borders has cut jobs and closed stores to boost its finances while also shifting its focus from less-profitable categories such as music in order to concentrate more on children’s books, toys, stationery and its cafe.
Borders received a commitment for a $550 million credit line from GE Capital in January. But it said at the time it was still considering an in-court restructuring.
The company received a delisting warning from the New York Stock Exchange last week because its stock has not traded above $1 for 30 consecutive days.
On Friday, the stock fell 12 cents, or 30.9 percent, to 26 cents during midday trading. The stock has traded between 23 cents and $3.29 over the past 52 weeks.
