As you’ve probably heard, the mega book retailer Borders filed for bankruptcy today with plans to close 200 stores across 35 states after receiving a commitment from GE Capital for $505 million in “debtor-in-possession” financing.
Borders filed for bankruptcy protection today, turning what had been a business success story (small-town bookstore turns crazy successful national mega-retailer) into a cautionary tale.
Some of Borders’ problems weren’t the company’s fault. There are now hundreds of places to buy books online or in physical bookstores. That forces all book sellers to compete over price.
And, of course, Borders made a lot of mistakes, too: Ill-fated expansion plans, too many stores that lose money and being late to realize the popularity of electronic books.
In a bankruptcy court filing, the company offers an explanation of how it found itself battered and broken enough to need the help of a bankruptcy court. Here’s what Borders said went wrong:
- Too Many Unprofitable Stores
- Bad Economy and Changing Book Business
- Amazon, Kindle, iPad, and More…