The publishing industry is undergoing some pretty dramatic changes in recent years, with many of these changes reflected in brick and mortar bookseller bankruptcies. And Borders Group Inc. (BGP) is likely the most recent victim of the increasing movement towards e-books and digital media.
According to The Wall Street Journal, the Ann Arbor, Michigan-based national chain which made its major imprint with physical shelf-space for literary best-sellers and popular music CDs, is set to file for bankruptcy this week. With its Chapter 11 bankruptcy, Borders will likely close more than 600 stores nationwide and lay off thousands of its nearly 20,000 employees as it attempts to restructure to become more competitive with online retailers like Amazon.com and more nimble book retailers like Barnes and Noble.
According to The Journal, “The bookseller suffered a series of management gaffes, piled up unsustainable debts and failed to cultivate a meaningful presence on the Internet or in increasingly popular digital e-readers. Its online struggles proved critical as consumers became accustomed to getting books mailed to their doorsteps or downloaded to handheld electronic devices…People familiar with Borders's plans said the company wants to restructure in bankruptcy court with a goal toward remaining a viable business. The terms of Borders' bankruptcy financing are intended to help it avoid the fate of retailers such as Circuit City Stores Inc., which was forced to liquidate after seeking bankruptcy protection during the height of the financial crisis. Borders is nearing a deal for so-called debtor-in-possession financing, which would keep the company operating in bankruptcy, the people said.”
While Borders’ future as a stand-alone bookseller is unclear, what is apparent is how the chain’s troubles reflect the changes in the landscape of reading. “Online shopping, and the advent of e-readers, with their promise of any book, any time, anywhere, and cheaper pricing, have shoppers abandoning Borders and Barnes & Nobles bookstores as they did music stores a decade ago.”
The Borders bankruptcy can also be seen as a case study in how a Chapter 11 filing can help many companies adapt to a changing business landscape following our recent Great Recession. In the wake of the housing crisis, lingering consumer skittishness, drops in tourism and trade, and other economic woes, many industries have faced financial challenges, taking the businesses that serve them right along with it. If your industry has been affected by the economic downturn, Chapter 11 can buy you the time to reorganize the way you do that business and get back to making better financial decisions. And buying you time to tweak your business model is part of what Chapter 11 is all about: diminishing debt while you save your means to profit.
So, are you an active businessman or woman who is considering a new chapter for your business through the benefits of a Chapter 11 bankruptcy filing? Or are you an average American reading about the benefits of bankruptcy and want to learn how these types of benefits can help you? If you are seeking the broad protections of bankruptcy, it’s best to consult with a qualified attorney before filing. A qualified bankruptcy attorney is important during the bankruptcy process to help you navigate any uncertain waters and work in your best interests throughout the duration of the case, regardless of your status. The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-888-234-4181, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.