Borders bankruptcy said to be imminent



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>Borders, the nation's second-largest bookstore chain with several locations in New Hampshire, might file for bankruptcy as early as this week.Bloomberg.com reported last week that the bankruptcy could be imminent. Such a move could result in the closure of up to 150 stores. Bloomberg cited three sources "familiar with the matter" who were not named because the proceedings are not public.There are four Borders superstores in New Hampshire in Concord, Keene, Nashua and West Lebanon, as well as four Borders Express locations in North Conway, Newington, Salem and Concord.It's unclear at this time whether any stores in the state will close should the company enter bankruptcy, but it would not be the first time in recent memory that Borders has shut down locations in the Granite State.In 2009, Borders - which owns Waldenbooks - closed 200 mall bookstores across the country, including Waldenbooks locations in the Steeplegate Mall in Concord and the Lilac Mall in Rochester and a Borders Express at the Pheasant Lane Mall in Nashua.On Jan. 27, Borders announced that GE Capital, a subsidiary of General Electric, had committed $550 million in refinancing, subject to several conditions, including that they obtain $175 million from additional lenders; secure $125 million of junior debt financing from vendors and other lenders; as well as close underperforming stores "as soon as practicable."Borders operates more than 650 stores in the United States, with approximately 19,500 employees. As part of its refinancing efforts, the company has delayed payments to its vendors and has discussed refinancing options with landlords and other parties. In the statement, Borders president Mike Edwards acknowledged "the possibility of an in-court restructuring."Third-quarter sales in 2010 at the retail giant were $470.9 million, a more than 17 percent drop from the same period the previous year, with comparable store sales declining more than 12 percent.Rising sales of e-readers, decreased discretionary spending and increased competition from online sellers like Amazon has hurt the company's bottom line.There has been some speculation that the Ann Arbor, Mich.-based company may merge with competitor Barnes & Noble."Our goal is to have a strong Borders for the long term," said Borders spokeswoman Mary Davis in a statement. "As such, Borders is involved in discussions with multiple parties -- including lenders, vendors, landlords and other business partners -- to determine the route that will provide it with the best opportunity to move forward with its business strategy." -- KATHLEEN CALLAHAN/NEW HAMPSHIRE BUSINESS REVIEW<

 

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