Borders' announcement included plans to close 194 stores with the possibility of others to follow. The company said it had secured $505 Million in debtor-in-possession (DIP) financing from GE Capital.
"This financing should enable Borders to meet its obligations going forward so that our stores continue to be competitive for customers in terms of goods, services and the shopping experience. It also affords Borders the opportunity to move forward in implementing the appropriate business strategy designed to reposition Borders to be a potentially vibrant, national retailer of books and other products," said Mike Edwards, president of Borders Group, in a press release.
Borders' management and board believes the company has a number of strengths that will help it successfully compete once it emerges from Chapter 11.
"For decades, Borders has been a beacon of engagement -- a highly frequented destination for consumers and a significant venue for authors and vendors to showcase new books and merchandise. We have the ability, based on our brick and mortar presence nationally; the on-line capabilities we have in place; the loyalty of, and access to, our customers; and the products and services we offer to be an important and easy access destination of exploration and purchase for readers across the country," said Mr. Edwards.
While Mr. Edwards was sounding upbeat, others were not.
"This is the biggest bankruptcy in the history of the book business," Albert Greco, senior researcher at the Institute for Publishing Research, told The Washington Post. "This is really a depressing day."
Some have suggested that once Borders removes some of its unwanted store locations that perhaps it will be acquired by larger rival Barnes & Noble. Borders investor William Ackman had offered to finance a $963 million deal to acquire Barnes & Noble back in December.
Independent bookstores continue to hold out hope that Borders' trouble will be good for their businesses.
Michael Norris, a senior analyst with Simba Information, told USA Today, "Independent bookstores definitely have a shot at benefiting the most from store closures."
- Borders Group Files for Reorganization Relief Under Chapter 11 (PDF) - Borders Group
- Borders files for Chapter 11 bankruptcy; 4 Michigan stores among 200 to close - Detroit Free Press
- Borders files bankruptcy and plans to close 30% of stores as book market changes - The Washington Post
- Borders Files Bankruptcy, Is Closing Up to 275 Stores - Bloomberg News
- Borders' loss may be others' gain in book war - MSNBC