Borders Suspends Payments to Some Publishers

[DMcCunney]

I wonder just when Borders will file for bankruptcy, and possibly cease operations.

http://blogs.publishersweekly.com/blogs/PWxyz/?p=3945
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Dennis

[screwballl]

Bankruptcy does not always mean the end of a company... they may sell and close out some stores, or sell them off as franchises, but nowadays it is more of a way to consolidate debts to be paid off easier.

[Daithi]

And with one of the big six publishers suspending shipments to Borders it looks rather grim.

[DMcCunney]

Originally Posted by screwballl

Bankruptcy does not always mean the end of a company... they may sell and close out some stores, or sell them off as franchises, but nowadays it is more of a way to consolidate debts to be paid off easier.

I'm aware of bankruptcy laws, thank you. One question is whether they voluntarily go Chapter 11, or are forced into Chapter 7.

Creditors must approve a bankruptcy plan, as must the courts , so continued operation is not a foregone conclusion.
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Dennis

[neilmarr]

Ingram, of course, is sticking with Borders so far, even though publisher return is now officially suspended (Ingram is Border's biggest supplier and the company has a vested interest in B&M). But Ingram, of course, is the planet's biggest distributor -- not a publisher.

My own indie house has decided to stand by the Ingram decision and leave our catalogue in place, but other publishers are deserting like rats from a sinking ship. I don't know how this will affect Ingram itself because most publishers are Ingram clients.

It's an odd state of affairs. I'll update as soon as there's something concrete to report.

Cheers. Neil

[ATimson]

Originally Posted by neilmarr

My own indie house has decided to stand by the Ingram decision and leave our catalogue in place, but other publishers are deserting like rats from a sinking ship. I don't know how this will affect Ingram itself because most publishers are Ingram clients.

My understanding is that the publishers wouldn't be affected if Borders purchased all their books through Ingram, instead of through the publisher directly. Ingram would still have to front up after 60 days, even if Borders isn't paying them until later.

[HarryT]

Borders went bust in the UK about a year ago. I'm sorry to see that it looks as if the same thing may happen in the US too.

[Bilbo1967]

Originally Posted by HarryT

Borders went bust in the UK about a year ago. I'm sorry to see that it looks as if the same thing may happen in the US too.

Waterstones may be in trouble too, apparently;

http://www.bbc.co.uk/news/business-12117510

Although the likeliest outcome if HMV went under would be that Waterstones would be sold as a going concern.

[DMcCunney]

Originally Posted by HarryT

Borders went bust in the UK about a year ago. I'm sorry to see that it looks as if the same thing may happen in the US too.

I'd call it a virtual certainty.

There was an interesting development not long back. A VC firm owns about 40% of Borders Group, and announced a commitment to find the funding to allow Borders to acquire Barnes and Noble. This would be a case of "little fish swallows big fish", and more interesting because the little fish is a lot sicker than the big one. The question would be "Can two sick companies make a healthy one?" The usual answer to that question is "No".

And VCs aren't long term investors. Their motive would be to combine the chains, close redundant stores, cut costs, and try to boost the stock value of the merged entity, then sell at a healthy profit. One question is whether the combined entity would be viable, and another is who would buy the VC's shares, and why.

Publishing in general is beset by too many books chasing too few readers, and book selling is beset by too many stores chasing too few customers.

What's happening to Borders is not a surprise.
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Dennis

[elcreative]

There's already a separate thread dealing with this... and whilst HMV owns Waterstones, it is treated as a wholly independent subsidiary and has already been subject to attempts to buy out from HMV which become more likely to succeed in the current economic climate...

Originally Posted by Bilbo1967

Waterstones may be in trouble too, apparently;

http://www.bbc.co.uk/news/business-12117510

Although the likeliest outcome if HMV went under would be that Waterstones would be sold as a going concern.

[Bilbo1967]

Originally Posted by elcreative

There's already a separate thread dealing with this...

OK - thanks.

Originally Posted by elcreative

and whilst HMV owns Waterstones, it is treated as a wholly independent subsidiary and has already been subject to attempts to buy out from HMV which become more likely to succeed in the current economic climate...

Yes I know. That's what the article I linked to said.

[elcreative]

They've updated the article since I first read it today... at that time it didn't cover the separate sale option etc.

Originally Posted by Bilbo1967

OK - thanks.



Yes I know. That's what the article I linked to said.

[Bilbo1967]

Originally Posted by elcreative

They've updated the article since I first read it today... at that time it didn't cover the separate sale option etc.

Oh, no problem. Apologies for being a bit touchy about things

[Fbone]

Latest report from Reuters says as of Oct 30th Borders has $23 million in cash and owed vendors $444 million.

http://www.reuters.com/article/idUSN0528385620110105

[neilmarr]

What Ingram and others are doing is actually providing a means of re-financing existing loans. It's a good break for Borders. Trouble is that other retailers are now so mad about that show of favouritism that they're also demanding the right to delay payments themselves (which they regularly do anyway, in my experience).

As Harry might remember, by the way, when Borders closed simultaneously all their stores in the UK, remaining book stock (supplied by publishers) was all but given away. Payment due would be on RRP minus discount, but anything owed would be in the hands of the liquidator and not the publishers and authors.

Cheers. Neil