Borders, the national book chain, have been feeling the pinch of the new digital paradigm. Book profits continue to fall. Borders’ has been losing money for years. The brick and mortar novel retailer appeared to be on the edge of extinction as it postponed payments to publishers last week.
Borders asking for probabilities still
The potential a bankruptcy proceeding for Border Books has been bad for business. Publishing houses have been concerned. Borders executives will meet with publishers this week in a try to preserve the relationship. The third quarter earnings report showed the bookseller had lost $74 million as it came out Dec. 30. The company needs to do something financially as the year-over-year sales shows such a steep dive. On Dec. 30, Borders’ stock plunged from $1.16 to 96 cents, putting the business on the verge of getting delisted from the New York Stock Exchange. Two of the top Borders executives resigned from the position on Monday as well.
What publishers should know about a Borders a bankruptcy proceeding
Publishing houses have a lot to lose if Borders is unable to recuperate. When it comes to the business, the novel trade is represented a lot. About 10 percent is just in the one company. The merchandise space at 675 Borders locations would be lost by several of the authors that would also have to lose tens of millions of dollars. A Borders spokesperson told the NY Times that the business had not yet entered a liquidity crisis. There are still a lot of books within the Borders stores around the country. Then the site was crashed by holiday traffic. This was when it was need most often too. Plus, a year-end practice of returning unsold inventory to authors for full credit was discontinued to keep books on shelves as publishers consider halting shipments.
Border having a bankruptcy in the 2011 year
One Borders book distributor has already pulled the plug. When Borders announced a delay in repayments to authors, Rowman & Littlefield Publishing Group Inc. stopped shipping books through its National Book Network. The other publishers can't choose if this is something they should do or not. The Wall Street Journal spoke with a publishing executive about this week's gathering. He said that it is possible that Borders may ask for the repayments that haven't been made to be debt for a short while. Borders’ has to discover some way to market better. If it does not happen, there more than likely the Border 2010 a bankruptcy proceeding will happen.
Information from
New York Times
nytimes.com/2011/01/04/business/media/04borders.html?_r=1&partner=rss&emc=rss
Daily Finance
dailyfinance.com/story/company-news/borders-getting-closer-to-the-booksellers-final-chapter/19782328/
Wall Street Journal
online.wsj.com/article/SB10001424052748703820904576058261990943614.html
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