Pulse2 Technology and Social Media News » Borders Group Inc.

Barnes & Noble Expects Borders Shut-Down To Boost Them Up To $200 Million

Amit Chowdhry — Tue, 30 Aug 2011 19:03:58 +0000

Barnes & Noble, Inc. (NYSE:BKS) reported that they are expecting a sales boost of $150-$200 million due to the dissolution of Borders book stores. Barnes & Noble expects a sales increase at stores that are open at least a year to increase 2-3% during their 2012 fiscal year, which starts May 1. Barnes & Noble acknowledged the competition they saw from Borders to find discounts due to the closing of 399 stores.

However Barnes & Noble will benefit from Borders’ permanent shut-down. Barnes & Noble expects a revenue increase of $150 to $200 million in their current fiscal year. Barnes & Noble had a 36% market share as of March while Borders had a 10.7% market share. “The company is encouraged by the progress achieved against our strategy and believes in our plan to continue to appropriately invest in the massive digital opportunity,” stated Barnes & Noble CEO William Lynch.

[AnnArbor.com]

Borders Website May Live On Past The Bankruptcy

Amit Chowdhry — Mon, 01 Aug 2011 18:58:11 +0000

After the liquidation of Borders book stores are done due to the bankruptcy of the company, the website may live on. Borders Group Inc. is asking the U.S. Bankruptcy Court in the Southern District of New York to allow the company to pursue the sale of its brand name, website, and other I.P.

Borders Gruop Inc. is closing all of its 399 remaining stores as part of their liquidation. This is a similar strategy that Circuit City pursued. Although Circuit City does not have any retail stores left, but their website was sold and is still operational.

Borders said that the sale of their IP assets “should garner significant interest from potential bidders.” They already have multiple inquiries too. Online sales made up about 3% of Borders’ total revenue. Borders also wants to sell their membership lists, customer information, contact information, email addresses, and purchasing history. Borders has about 40 million members as part of the Borders Rewards program.

[AnnArbor.com]

Borders Liquidating All Remaining Stores [Note From President]

Amit Chowdhry — Tue, 19 Jul 2011 01:43:13 +0000

Borders Group, Inc. (PINK:BGPIQ) is shutting down their remaining 399 stores. All 11,000 remaining employees across the company will be laid off. The bid deadlines for the company passed.

Venture capital company Najafi declined to submit a new bid. Liquidation companies Hilco and Gordon Brothers were the only bidders left after Najafi declined. Alabama-based bookstore company Books-A-Million was interested in acquiring Borders at one point as well. Borders filed for bankruptcy in February and they closed 200 stores around then.

Borders Group is based in Ann Arbor, Michigan. The company was founded in 1971 by Tom and Louis Borders. They started the company when attending University of Michigan. Borders was acquired in 1992 by Kmart.

Kmart attempted to merge Waldenbooks, which they acquired 8 years earlier, with Borders. Kmart spun off Borders in a structured stock-purchase plan.

Below is a note from Borders President Mike Edwards to employees about the liquidation:

Good afternoon,

I wanted to reach out to you and give you an update on Borders’ reorganization process. As you know, last week we submitted a proposal from Hilco and Gordon Brothers as the stalking horse bid, which set the minimum bid requirement for the auction.

Following continued negotiations and the best efforts from all parties, no bidders have presented a formal proposal to keep our company operating as a going concern. Therefore, under the terms of our DIP financing agreement, we intend to present to the court for approval the proposal from Hilco and Gordon Brothers, under which these two companies will purchase our stores’ assets and administer the liquidation process. We will submit this proposal at a hearing scheduled for Thursday, July 21, and we will not proceed with the auction originally scheduled for tomorrow, July 19.

All of us have been working hard towards a different outcome, and I wish I had better news to report to you today. The truth is that Borders has been facing headwinds for quite some time, including a rapidly changing book industry, eReader revolution, and turbulent economy. We put in a valiant fight, but regrettably in the end we weren’t able to overcome these external forces.

For decades, our stores have been destinations within our communities – places where people have sought knowledge, entertainment, and enlightenment and connected with others who share their passion. Whether you work in our stores, distribution centers, or at the Store Support Center in Ann Arbor, each of you has played a valuable role in helping ignite the love of reading in our customers. Together, Borders and Waldenbooks associates have helped millions of people discover new books, music, and movies, and I hope you’ll take pride in the role we’ve played in our customers’ lives.

Now we must begin switching gears and preparing for the wind-down process, which we expect to begin for stores as soon as this Friday, July 22 and conclude by the end of September. Wind-down will begin in phases in other areas, such as our Store Support Center and distribution centers, over the next week. Please know that we are committed to sharing information with you as quickly as possible. To that end, you should expect to hear from your manager by the end of this week with details regarding separation information, severance, benefits, and other resources for employees. You have my assurance that we will do whatever we can to help our employees through this transition.

In closing, I’d like to express how much I appreciate each and every one of you and all that you’ve done. The last few months have been stressful, uncertain times, but you’ve stood by Borders and have continued to impress me with your dedication, resilience, and strong drive to fight until the very end to save our company. Whether you’ve been with Borders for a few months or several years, I hope you know how much I value you and all that you’ve contributed. The coming weeks will be difficult as we wind down operations, but I hope you’ll continue to hold your head high. You’ve done me proud and, from the bottom of my heart, I thank you.

- Mike

[paidContent]

Borders Group Believed To Have At Least One Offer

Amit Chowdhry — Fri, 13 May 2011 02:47:26 +0000

Borders recently had a routine hearing earlier this week. Judge Martin Glenn asked for an update from both lawyers. After returning from a brief meeting that was within earshot, the judge had adjourned the hearing. The judge was updated on whether there were bids for the company and sources say that at least one bid was made. Lease terminations for several properties were approved and Borders was also granted a request to extend the deadline for removing pending civil actions. [PublishersWeekly]

Borders Files For Chapter 11 Protection, Shutting Down 30% Of Nationwide Stores

Amit Chowdhry — Wed, 16 Feb 2011 21:24:59 +0000

Borders Group Inc. (NYSE:BPG) has filed for Chapter 11 protection today. The Ann Arbor, Michigan based company is shutting down 30% of their stores nationwide. Borders is seeking protection from creditors as they filed for bankruptcy at the U.S. Bankruptcy Court in Manhattan.

“It has become increasingly clear that in light of the environment of curtailed customer spending… and the company’s lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor,” stated Borders Group President Mike Edwards.

The Chapter 11 will allow Borders to reorganize and give them access to new capital. Borders received a $505 million loan from GE Capital to reorganize operations while in bankruptcy. Borders has assets worth up to around $1.28 billion and liabilities that are around $1.29 billion as of December 25th. Borders’ five largest creditors include Penguin Putnam Inc., Hachette Book Group, Simon & Schuster Inc., Random House, and Harper Collins Publishers.

[WSJ]

Hedge Fund Manager Bill Ackman Loses $125 Million On Borders Bookstore Investment

Amit Chowdhry — Fri, 11 Feb 2011 23:14:54 +0000

Bill Ackman’s hedge fund Pershing Capital has lost $125 million on its investment in Borders Group Inc. Ackman admitted that the Borders investment was a mistake. Borders is rumored to be filing for bankruptcy on Monday or Tuesday. Borders’ entire market cap is less than $30 million as of right now as well. Ackman had an interest in financing a $900 million merger with Barnes & Noble. [AnnArbor.com]

Borders Receives Notice About Not Being Compliant For NYSE Listing

Amit Chowdhry — Sat, 05 Feb 2011 23:04:59 +0000

Borders Group Inc. (NYSE:BGP) has received a notice from the NYSE Regulation, Inc. that they are not longer compliant with the continued listing standard of the New York Stock Exchange, Inc. (the “NYSE”). The NYSE requires a minimum average closing price of $1.00 per share over a 30 trading day period. Borders is being given 6 months from yesterday to fix the deficiency.

Borders Close To Getting A $550 Million Loan From GE Capital

Amit Chowdhry — Fri, 28 Jan 2011 20:39:17 +0000

Borders Group, Inc. (NYSE:BGP) said this past week that they have received a $550 million in refinancing loan from GE Capital. The company has to meet certain requirements for the loan including converting delayed payments into loans for publishers.

Borders was considering bankruptcy as an option. “We view the refinancing route as the most practical, efficient and beneficial to all parties, and we are working with our vendors in this regard,” stated Borders CEO and Chairman of the Board. “At the same time, given the current environment surrounding Borders, and in order to assure that the company can pursue its efforts to position itself to properly implement its business plan, it is prudent as well for Borders to explore alternative avenues.”

Borders needs to raise $125 million in junior debt financing by converting the vendor payables or from other sources in order to lock in the secured financing from GE Capital. One of Borders largest shareholders William A. Ackman said that he would be willing to loan Borders $960 million to finance a merger with Barnes & Noble.

Borders Stalling Payments To Book Publishers

Amit Chowdhry — Fri, 31 Dec 2010 22:05:30 +0000

Borders Group, Inc. (NYSE:BGP) has been delaying payments to book publishers. This indicates that Borders may be losing a battle to the popularity of e-books. Borders is delaying payments so that they could refinance their debt. Borders may have to break their existing credit deals in 2011 after facing a “liquidity shortfall” said the company. In the company’s most recent quarter, they lost $74.4 million. [Electronista]

Borders Announces $139 Kobo E-Reader With WiFi

Amit Chowdhry — Wed, 29 Sep 2010 17:21:46 +0000

Borders Group, Inc. (NYSE:BGP) has announced the Kobo 2 e-reader with WiFi at a low price of $139. This version has a faster processor and three new colors. The faster processor makes page-turning faster.

The new Kobo can be reordered online or can be purchased in stores at the end of October. The Kobo isn’t the only e-reader that Borders launched. They also sell the Aluratek “Libre” eBook Pro, Velocity Micro’s Android-based Cruz Reader R1010, Cruz Tablet T103, Sony Touch, and Sony Pocket.

[BusinessWeek]