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Borders Files for Bankruptcy; 200 Stores to Close

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As expected, Borders, one of the U.S.’s only two nationwide bookstore chains, filed for Chapter 11 bankruptcy today. It plans to close about 200 stores (roughly 30% of the total), including almost half its 30 Chicago-area stores and three of its five Manhattan locations. Borders, which employs about 6,100 full-time workers, owes the six largest book publishers combined about $182 million; one publisher told the Wall Street Journal, “If publishers are lucky, they’ll get back 25 cents on the dollar.”

However, the company has received a promise of over $500 million in reorganization financing from a group led by GE Capital, to give it breathing room to restructure.

In the near term the news is probably good for rival Barnes & Noble, which may take over some Borders stock and locations. But the brick-and-mortal bookstore business has been declining for years.

Barnes & Noble has been trying out new marketing strategies in an effort to stave off Borders’ fate, such as a gift card deal with Groupon, and its new Nook Color e-reader has been receiving some positive reviews. Still, many industry observers predict a continuing steep decline in the large-scale bookstore business.

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About Jon Sobel

Jon Sobel is a Publisher and Executive Editor of Blogcritics as well as lead editor of the Culture & Society section. As a writer he contributes most often to Culture, where he reviews NYC theater; he also covers interesting music releases. Through Oren Hope Marketing and Copywriting at http://www.orenhope.com/ you can hire him to write or edit whatever marketing or journalistic materials your heart desires. Jon also writes the blog Park Odyssey at http://parkodyssey.blogspot.com/ where he visits every park in New York City. And by night he's a part-time working musician: lead singer, songwriter, and bass player for Whisperado, a member of other bands as well, and a sideman.