Say it ain't so! I was afraid this day would come. As a new NOOKcolor owner, I even feel partially responsible. Borders Group Inc, the second largest bookstore chain, is fighting to survive. Unfortunately, the Ann Arbor, MI home-based bookstore is suffering due to eReaders, downloadable eBooks, online sales, and outstanding debt. Their worst mistake was perhaps allowing Amazon.com to handle its online business. Now Amazon.com is the largest bookseller.
The signs are all there. The CEO resigned. Approximately fifteen managerial positions were cut. Eleven stores in Michigan have closed in the past three years. Year-end payments for inventory were delayed causing publishers to slow down shipping items. Vendors reportedly stopped being paid, causing smaller publishing houses to take legal action. Borders Group most recent quarterly report made it even clearer; the bottom line was a $74 million net operating loss.
Hopefully Borders Group lawyers can keep them out of bankruptcy court and secure a credit line large enough for its doors to stay open. At the time of this post, Borders has not released a press statement or financial news update about its restructuring or bankruptcy process. Check back here for more updates.