Borders Bookstore Faces Bleak Future
With dismal holiday sales, sagging shares, loan deadlines, layoffs and the resignation of its most recent CEO, Ron Marshall, Borders Group Inc. may face pressure from investors to consider a pre-packaged bankruptcy or liquidation, the Deal Pipleine reported on Saturday. The book retailer’s market cap is only about $53 million, slightly more than the $42 million senior secured term loan Borders is due to repay April 1 to Pershing Square Capital Management LP, which also holds more than 30 percent of its shares. Failure to pay will trigger a default on Borders’ $1.13 billion credit agreement. Pershing Square did take shopping mall REIT General Growth Properties Inc. into a prepack last April, but some experts think that it is doubtful Borders’ creditors will be interested in a reorganization of the company, especially without a CEO.
We’ll keep an eye on the situation and, of course, hope Borders gets it all worked out without affecting the many publishers that sell to them and the authors that rely on them.
[...] a little dire to me. Strangely enough that’s what the some have been reporting about stores here and here. Remember that movie You’ve Got Mail? Where Tom Hanks plays the heartless suit that [...]