Borders in trouble - B&N not much better

A bankruptcy and 10 cents or less on the dollar will be brutal for any of the companies with material amounts owed. That appears to be the most likely outcome at this point. Some small publishing companies may have very large accounts receivable relative to their net worth and will be hardest hit so I am afraid you could be right.

 

I;m not sure how it all came about. I wish I had kept the article now. I wonder what came first, the demand by customers of Costco and Sam's Club or the decision to sell there.

Eddie

 

My only friend . . .

This is the end:

Borders to Shutter Distribution Center; Stock Tanks
By Jeanine Poggi 01/12/11 - 11:50 AM EST


NEW YORK (TheStreet) - Borders(BGP_) stock is tanking, as the book seller says it will shutter its distribution center in Tennessee and lay off workers, its latest move to revive its struggling business.

The Nashville, Tenn. Center will close in July and result in 310 layoffs. The company said the move is part of its "long-term plan to enhance the efficiency of its distribution network and reduce operating expenses." . . .​

http://www.thestreet.com/story/1097...bution-center-stock-tanks.html?cm_ven=GOOGLEN

 

I know Apple doesn't discount their products no matter where you buy them.

I try to go to Borders at least once a week and this will hurt...

I feel bad for all involved...

 

Borders Runs Into Some Resistance With Publishers

From today's Wall Street Journal

By JEFFREY A. TRACHTENBERG

Major publishers are divided on whether to support Borders Group Inc.'s efforts to stabilize its finances after a disappointing round of initial meetings, with some expressing doubt that they'll agree to delay payments for books.

Borders is expected to meet with some publishers on Thursday afternoon for another round of talks over extending bills for books already shipped so it can buy time to sort out its debt-heavy balance sheet. The question is whether the troubled retailer can convince publishers it has a strategic plan for reversing recent losses.

Borders in late December sent shock waves through the book industry when it informed some publishers and distributors that it was halting payment on bills to conserve cash as it attempts to refinance its senior credit facility. Several publishers and one distributor said they have since stopped shipping books to the retailer.

Several publishers who met with Borders executives last week to discuss outstanding bills expressed dissatisfaction that the retailer failed to provide details on its refinancing efforts and didn't offer a sound strategy for reversing recent losses and declining revenue.

Several publishers say that Borders has failed to provide details on its refinancing efforts and its strategy.

It couldn't be learned whether Borders will present firm details on its refinancing plans at Thursday's meeting. Borders declined to comment.

For the quarter ended Oct. 30, Borders posted a loss of $74.4 million, compared with a year-earlier loss of $37.7 million. Revenue fell 18% to $475.6 million, while same-store sales, a key indicator, dropped 13%.

Borders has been in discussions with restructuring advisers about ways to rework its balance sheet, according to people familiar with the matter. As of last week, Borders didn't have plans to bring aboard bankruptcy and restructuring lawyers, one of those people said, and it didn't contemplate filing for bankruptcy at that time.

People familiar with the situation said last week that Borders was in talks with General Electric Co.'s GE Capital for new debt that would replace the company's existing senior credit facility. As part of those discussions, GE Capital had asked Borders to explore whether vendors might be willing to delay receiving payments, these people said.

One publishing executive said the company is "taking a pragmatic view" of the situation, one that could entail direct delivery of new titles in exchange for guaranteed payment. This executive said it was unclear whether the company would accept an interest-bearing note from Borders. "It's a fluid situation," this person added.

A spokesman for book distributor Ingram Content Group said the company continues to supply new titles to Borders. He declined to comment on terms. Ingram, a unit of closely held Ingram Industries Inc., based in Nashville, Tenn., handles books from a range of publishers.

Separately on Wednesday, Borders said it is now in the process of closing its distribution center in Tennessee and that approximately 310 jobs will be eliminated. The retailer noted that the decision wasn't related to its ongoing refinancing effort or the delay of some vendor payments.​

http://online.wsj.com/article/SB10001424052748704803604576078301200449770.html?mod=googlenews_wsj

On the other hand, from Anime News Network:

News: Diamond Comics Distributor Puts Borders Orders on Hold
posted on 2011-01-12 23:36 EST
Bookstore chain also shutters Tennessee warehouse, 310 jobs
The ICv2 news site reports that Diamond Book Distributors has placed all orders from troubled bookstore chain Borders on hold. The distributor handles graphic novel distribution for several manga publishers, including Bandai Entertainment, dark horse, Digital Manga Publishing, Udon Entertainment, and Yaoi Press.

Another industry website, Publishers Weekly, also reports that the Borders bookstore chain is planning to close its LaVergne, Tennessee warehouse facility, eliminating 310 jobs in the process. A company representative stated that the closure is part of Borders' long-term strategy to lower operating costs, but that it is not related to the chain's delayed payments to publishers. Borders will meet with publishers on Thursday to discuss these missed payments.

ICv2 notes that Borders' financial issues affect manga publishers more than other publishers, due to the large influence that the chain had on manga's popularity surge in the last decade.​

 

http://www.annarbor.com/business-re...borders-stock-up-30-after-refinancing-rumors/

 

http://community.livejournal.com/iworkatborders

 

" . . .Many publishers have said that they have completely stopped shipping books to Borders. . ."

Today's NYT Blog:

Publishers Told to Say Yea or Nay to Borders Deal by Feb. 1
By JULIE BOSMAN AND MICHAEL J. DE LA MERCED
Publishers have been given until Feb. 1 to decide whether they are willing to accept Borders’ proposal to turn delayed payments into a loan, several people briefed on the situation said on Friday.

The goal is for publishers to take up one-quarter to one-third of Borders’ reorganized debt, but the exact percentage has not yet been determined.

The deadline has pushed publishers into deep discussions with their legal and financial advisers, who are representing them as a group in negotiations with Borders. Publishers are being represented by Lowenstein Sandler, a law firm, and Alvarez & Marsal, a consulting firm.

On Thursday, Borders met with a small group of publishers, including several of the largest publishers in the industry. Borders told the group that it planned to cut costs and improve its financial situation.

But on Friday, publishers remained skeptical of the proposal put forth by Borders. One publisher said that the proposal was not enough to convince the group that Borders had found a way to revive its business, and that they were less optimistic than ever that publishers could return to doing business with Borders.

Many publishers have said that they have completely stopped shipping books to Borders, after the bookseller abruptly notified them at the end of December that it was delaying a scheduled payment.​

 

From examiner.com Detroit:

Borders Books edges closer to potential Chapter 11 bankruptcy
January 19th, 2011 10:36 am ET

By Richard Weaver

Ann-Arbor based Borders Books has taken another step in preparing for a possible Chapter 11 bankruptcy filing according to reports they have hired attorneys to file papers.
Early this month the number 2 bookseller in America had announced a delay in supplier payments saying they were doing so to avoid a “liquidity shortfall”.
A few days later they took resignations from the CIO, Scott Laverty, and General Counsel. Thomas Carney had served as their top attorney since 1994.
On Monday the chain announced the layoff of 35 employees as yet another move. Although the stock market looked upon the layoffs as a positive sign, rallying shortly, the reality of only 35 employees for such a large chain quickly lost its luster.
Stocks fell yesterday by 18 percent on the announcement they have hired the law firm Kasowitz, Beson, Torres & Friedman, well known for bankruptcy work.
It is possible Borders can pull through without a Chapter 11 filing if suppliers have confidence in their ability to do so and offers them concessions.
However in light of the economy and continued restructuring of the way consumers buy and read books combined with a lack of trust of other suppliers, it is possible suppliers will take a self-defense posture and assume other vendors will not play along. When this happens all vendors suffer by forcing a filing.​

http://www.examiner.com/business-de...ges-closer-to-potential-chapter-11-bankruptcy

 

I just wanted to write a kind word about Borders. When I logged onto my account last night my Borders Bucks balance had mysteriously dropped from $15 to $5. I had not made any purchases and the Bucks are supposed to be good until the end of the month. I called customer service today and, after a five-minute phone call, they set the balance at $20. Much appreciated by me!

 

Five minutes? That's unheard of with them! I spent over an hour twice trying to get them to honor one of those 50% coupons along with my personal shopping day and my borders bucks. (I even checked with a store manager near me to make sure that all of those were eligible.) Their phone service is unbelievably bad (inept, unprofessional, unresponsive and rude) even in this era of poor customer service. No apologies either - not that I would believe them to be sincere. Good riddance!

 

I would hope Borders stays in business, as it would be painful to see yet another venue for music and books shut down. But businesses are not built on hopes, and it looks like Borders' management is stuck in the quagmire of bad long-term decisions which usually sink a business. The simple solution would be to declare bankruptcy and renegotiate the leases, which are the real problem for Borders. But their reluctance to do so indicates to me that executive management might be working in their own selfish interest now, contrary to the best option for Borders as an entity.

 

Borders quit being a music outlet a long time ago.

 

Good news!

They just received $550 million of financing from GE Capital.

http://online.wsj.com/article/SB100...57506.html?mod=WSJ_hp_LEFTWhatsNewsCollection

 

Shhh.... not too loud.

Everyone is too busy bashing Borders.

 

They're not what they used to be, but I've recently found a half-dozen jazz CDs there that I had no idea existed, so they still count as a music outlet to me. God knows there's almost nowhere else to shop for CDs in the Chicago area.

 

The Internet.

 

Exactly. I still find good CDs at Borders.

 

I one I used to work at, the one where I was in charge of the music department for a while—it doesn't really have a music section anymore. It might be different in your town, but my town has limited pre-recorded music anyway so this is pretty bad news.

 

They must be brain-dead.

 

Not book read much now. Big book store need? No. Got cell phone scren read -- all infos all times. Book heavy and too full words. Many many words. Don't like.

d

 

Thanks for stating the obvious. I was talking about being able to pick up CDs locally.

 

I would be hard pressed to find any good CDs at a Borders locally.

 

From the NYT, last Sunday:

Payments by Borders Late Again
By JULIE BOSMAN
Published: January 30, 2011


Borders, the struggling book chain, said on Sunday night that it would delay more payments to its vendors and landlords as it tried to preserve cash and avoid bankruptcy.

In a statement, Borders said the delay was “intended to help the company maintain liquidity while it seeks to complete a refinancing or restructuring of its existing credit facilities and other obligations.”

Borders, the second-largest book chain in the United States, added that it “understands the impact of its decision on the affected parties.”

It is the second month in a row that Borders has delayed payments to vendors. In late December, Borders abruptly informed publishers that it would not make a scheduled payment, and later asked publishers to convert the missed payment into a sort of loan.

Publishers have not been persuaded to accept Borders’ proposal. Several publishers said last week that Borders executives had not addressed the fundamental issues that drove the company to its current troubled position.

In talks with Borders last week, several publishers did not formally reject Borders’ proposal, but made it clear that they were not inclined to accept it.

An executive at one major publisher said on Sunday night that the announcement was only the latest sign that Borders was headed toward bankruptcy.

“Now, the conversation is going to shift to, what is the best way to make sure that the successful stores, which is about half of the stores, can go forward as some kind of viable business?” said the executive, who spoke on the condition of anonymity. “And it feels like that’s going to be in some form of in-court restructuring.”

Borders said last week that it had received a commitment from GE Capital for $550 million in refinancing, but that the refinancing was contingent upon the company’s meeting several requirements, including signing agreements with publishers to convert delayed payments into loans.

​

http://www.nytimes.com/2011/01/31/b....nytimes.com/pages/business/media/index.jsonp

 

If someone could explain why Robin L takes such apparent glee in Borders' misfortunes, I'd love to know...