Borders filed for Chapter 11 bankruptcy protection at the U.S. Bankruptcy Court in New York on Wednesday.
Borders is hemorrhaging cash at the rate of $2 million dollars a day from underperforming stores. Borders intends to close 200 of its 642 stores nationwide. The closures will come in the next few weeks. Clearance sales could start as early as this weekend.
Borders will receive $505 million in debtor-in-possession financing from GE Capital Partners and others to help with the reorganization. Borders owes over $100 million to various publishers. Book sales nationwide fell 5 percent in 2010. Borders controls 14.3 percent of the book selling market. Barnes & Noble, on the other hand, controls 29.8 percent of the market which is helping them survive the economic downturn.
Borders has been in business since 1971, when it started out with one used bookstore in Ann Arbor, Michigan. Borders was owned by Kmart Corp. from 1992 until 2006. Borders committed a fatal error when it opted out of their e-commerce contract with Amazon.com in 2001. This decision made it possible for Barnes & Noble to eventually double Borders market share.
My oh my,yet another company going bankrupt in the last 2 years.If we had a REAL President,they would sit these companies down and find a way to help them stay in business and keep their people working.All without government bailout and bankrupt.Maybe it’s time for the Fair Tax.Get rid of the IRS and simplify the tax code.Is it my imagination or have we seen more businesses failing in the last 2 years?
This has been my observation too. Of course, being a fan and supporter of Ron Paul and the Campaign for Liberty I naturally gravitate toward deep sixing the IRS along with the vast majority of non-essential government agencies. We are sinking fast as a democracy.
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