Borders To Close 200 Stores

Borders Books will close 200 locations as part of a Chapter 11 bankruptcy filed today. Analysts say today's actions may not save the company.

The filing — which comes 40 years after Borders started as a used bookstore on Ann Arbor's South State Street — gives the chain a chance to reorganize by slashing expensive leases and reducing its debt load, actions that could return the company to profitability. But it also presents the possibility that Borders will fail to identify a sustainable business model over the next several months of the bankruptcy proceedings, an outcome that could lead to its liquidation. Borders, which lost $604.8 million from 2006 to 2009 and another $168.2 million in the first 11 months of 2010, plans to cut about 30 percent of its 640 stores, equal to about 200 locations — a move analysts view as absolutely critical to its survival. The company is losing about $2 million a week on the stores it plans to close, according to court documents. Borders also indicated in bankruptcy documents that it may close an additional 75 to 136 stores based on extenuating circumstances.