As expected, bookstore chain Borders Group filed a petition for Chapter 11 bankruptcy. It hopes to reorganize by closing underperforming stores—about 30 percent of its locations in the next several weeks.
Borders has secured $505 million in Debtor-in-Possession financing led by GE Capital to continue operations in its other stores and online.
“This financing should enable Borders to meet its obligations going forward so that our stores continue to be competitive for customers in terms of goods, services and the shopping experience,” said Borders president Mike Edwards.
He is confident the chain will emerge from Chapter 11 as a “stronger and more vibrant book seller.”
Borders sells eReaders and tablets from brands including Sony, Kobo and Velocity Micro.
Bookstores as a whole are expected to undergo a contraction with a 50 percent drop in brick and mortar shelf space for books within five years, and a 90 percent drop within 10 years, predicts Mike Shatzkin, chief executive of Idea Logical Co., according to The Wall Street Journal.
The Chapter 11 petition was filed in the U.S. Bankruptcy Court of the Southern District of New York.
Photo via The Christian Science Monitor