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Old 12-19-2010, 08:19 AM   #4
fjtorres
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Quote:
Originally Posted by Connallmac View Post
Could we possibly see both big chains slide into Chapter 11 next year?
Actually, the way I read between the lines I wouldn't be shocked to see Borders go to Chapter 7. Don't expect it but I think it could happen. Chapter 11 is generally used to fend off creditors while you get your house in order and clean up your act. That would be B&N, who seem to have a viable exit strategy from the dying world of high-volume brick-n-mortar p-book retailing.

Borders, on the other hand, seems to be too far gone for the usual Chapter 11 remedies; new management team, new product lines, closing down non-performing locations and focusing on the profitable ones... They don't sound like they have *any* profitable locations and their efforts on the ebook front are all outsourced and contracted-out. To a large extent the ony thing of value they have is real estate (if any) and the name, which is getting tarnished daily. Plus their small investment in Kobo.

As the article says, both chains need *big* sales this holiday season to fend off disaster. B&N might survive with just a so-so season on the strength of their Nook and NookColor numbers. Borders? Dunno. Who'd want to throw good money after bad to keep them afloat? They may have to go to liquidation if the quarter doesn't turn up significant profits.

Last edited by fjtorres; 12-19-2010 at 08:24 AM.
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