Faced with stiff competition from online book retailers like Amazon, plus the proliferation of e-books designed for devices like the Amazon Kindle and Apple’s iPad, Borders faces bankruptcy.
Borders Group Inc. is expected to file for bankruptcy early this coming week – the result of declining annual revenues and mounting rent obligations as well as its struggle to catch up to the e-book business that is credited with keeping the publishing industry afloat.
Borders, which is based in Ann Arbor, Mich., is the third largest bookseller in the United States. According to the Wall Street Journal, Borders is turning to Chapter 11 bankruptcy protection after failing to get publishers to agree to a plan that would have restructured a debt that currently totals over $500 million.
The company released a statement on Jan. 27 saying it received a conditional refinancing commitment from GE Capital for $550 million, but the agreement required approval by Borders creditors.