Borders Said to Be Seeking at Least $50 Million in Additional Financing

x
More distressing (though not surprising) news  . . .

Borders Group Inc. (BGP), the bankrupt book chain, is seeking at least $50 million in additional financing as sales trail expectations and publishers demand cash in advance, said two people who have seen the chain’s plans to reorganize.

The funds are needed to help Borders emerge from its in- court restructuring, said the people, who declined
to be identified because the process isn’t public. The retailer already has a $505 million debtor-in-possession loan, which offers sufficient capital for the next few months, the people said. The retailer may risk liquidation without further investment, easier terms from vendors or a buyer, they said.


Some publishers are spurning the reorganization the chain proposed to them privately, said a person familiar with the publishers’ strategy. At least one deems the revenue projections unrealistic because Borders no longer has enough stores to generate those sales, said the person, who declined to be identified because Borders’s presentations aren’t public.

Annual sales may drop to $1.5 billion, according to court papers, less than half what the chain generated two years ago. Borders, which is winding down about one-third of its more than 600 stores, has yet to file an outline of its reorganization plan in court.

“As a matter of ongoing company policy, we don’t comment on rumors,” said Mary Davis, a spokeswoman for Ann Arbor, Michigan-based Borders.

Company’s Origins

The book chain, which once operated more than 1,000 stores, lost business as customers switched to e-readers such as Amazon.com Inc. (AMZN)’s Kindle, introduced in 2007. Larger rival Barnes & Noble Inc. (BKS) invested in its own Nook device to attract customers.

Brothers Tom and Louis Borders founded the company four decades ago, building the chain to almost 20 stores before selling to Kmart Corp. in 1992. Three years later the retailer spun off the business, which had locations under the Borders, Waldenbooks and Planet Music brands.

Jefferies & Co. is a financial adviser to Borders. Josh Passman and Tom Tarrant, spokesman for Jefferies, didn’t return calls for comment.

Borders is seeking to reorganize, raise more capital, or find a buyer for all or parts of the company, according to Bruce Buechler, a lawyer for the unsecured creditors. New York-based Barnes & Noble isn’t viewed as a potential buyer for Borders, according to two people familiar with the process.

The lenders financing the bankruptcy reorganization are led by GE Capital.

This same article link can be found HERE.

Ever Wonder Why Borders is Bankrupt?

X

Another author signing at Borders, another fiasco.

Sarah set up a book signing for Dan VanHaften, co-author of Abraham Lincoln and the Structure of Reason. As I have written elsewhere on this blog (see here for but one example), Borders is rife with problems top to bottom. Here is the author's report of the event (with light editing, and my comments inside brackets):

Today I was at Orland Park (IL) Borders for the book discussion/signing. When I arrived I didn't see any signs, nor initially any books. I spoke with Sandra, the manager. She told me their shipment of Abraham Lincoln and the Structure of Reason books had been delivered by accident to Lowes. They'd been working for a week and hadn't been able to get their hands on this shipment. [Of course, did Borders consider calling the publisher and/or author so we could bring books to the event or send a second shipment? No.] Apparently Lowes sent it back to FedEx. Thus they had only three copies of the book (which I had already signed--they were brought down from the Oakbrook Borders--they were the last three copies Oakbrook had).

I talked with various people in groups of 1 or 2, and sold the three copies. About seven or eight other people talked to me. I described the book and they showed interest. I gave them my business card. They seemed happy to have my card, and hopefully will pursue a purchase over the Internet or from another store. I told them the book was available in various eBook formats. One of them told me he just got an iPad.

It was disappointing there were no signs up and only three books. [We have seen this over and over with Borders, who have routinely greeted our authors with, "Your signing is today?] They did seem to know Orland Park Borders had been publicized on the Friday WGN TV midday news. I'm hopeful some of the discussions with people who did not buy the book at Orland Park will lead to sales. On my way back, I stopped at the Oakbrook Borders. Even though there are now no books there, the two signs are still up. The manager (John Conger) told me that they would be getting more copies of Abraham Lincoln and the Structure of Reason for my April 30th book discussion/signing, and we would have even more space on the display at the front in the store (as shown in the pictures I took) after Caroline Kennedy's April 19th book signing.

Orland Park seems slipshod compared to Oakbrook Borders.

-----
TED: If I ran Borders, I can guarantee you sales would increase and authors and publishers would never encounter this sort of nonsense. Alas, Borders is about to go under and the reason is obvious: the help doesn't know how to help, the management doesn't know how to manage, and the bookstore doesn't know how to sell books. What a great business model.

New investors anyone? Looks to be about as safe as buying US Treasury bonds these days.

--tps