Borders has filed for Chapter 11 bankruptcy protection.
How likely is it that the chain can reorganize and recover? I'd put money on their ultimate demise.
With debts totaling $1.29 billion and assets in the range of $1.28 billion, there's a shortfall that won't easily be made up.
Several publishing houses have already written down Borders' past due account as uncollectable debt. How likely will they be to extend further credit later?
Also hurting Borders' chances is the trend towards on-line shopping, which Amazon mastered to the detriment of all others. The electronic reading device is gaining popularity, and again, Borders was last to the dance and all the partners were taken.
We can expect to see the usual round of store closings as the bookselling chain contracts down to a workable size. Deals will be cut to reduce the debt to pennies on the dollar, to get all those lingering balances off the books, and then what?
Borders can start over, if anyone will ship them product and risk not getting paid again.
In all likelihood, Barnes & Noble will fill the gap that will be created by the chaos that is restructuring. Local independent shops won't see much gain because they're small, without the room to hold as much inventory as B&N.
Amazon might pick up some of the slack, but for those who like to touch the book and read the pages that they, and not Amazon, select, the online option isn't a first choice.
Not enough books are sold to warrant the existence of Amazon, B&N and Borders. It's survival of the fittest, and Borders got old, slow and stodgy.
You don't see any dinosaurs around anymore, do you?