Borders files for bankruptcy

[queentess]

Originally Posted by bill_mchale

Gift cards are kind of complicated. In one sense they are a liability, since they represent goods and services they have already received money for that they still have to provide. On the flip side, I remember reading something years ago that said that a company was not allowed to record a profit associated with a gift card until it had been spent. So Borders probably is hoping that lots of people who received gift cards for Christmas comes in and uses them.

--
Bill

This is correct. Even if they have the cash in hand, they cannot record it as a revenue until the card is spent (which is why many cards have an expiration date). However, Borders is having a cash problem ("liquidity shortfall"), so even if people use their cards (which I did, in case they close the only Borders in my area) it doesn't really help them.

[Anthem]

Hats off, a moment of silence.

They are closing the only one that is near me, so there ends my relationship with Borders.

[jumpuphigh]

They are closing both of my Borders which is a shame since being able to go into them was really helpful for me when I was shopping for my ereader. Unfortunately, neither carried the Sony 650 so I had to buy it off of their website.

[queentess]

Originally Posted by boswd

I think people have to understand the word Bankruptcy does not automatically equate they are folding.

This is chapter 11 which is restructuring and protection from creditors. This isnt like Circuit City's bankruptcy where they were liquidated.

Circuit City filed for chapter 11 originally. So did Linens n Things. Many (sorry, I can't find a stat) business that file chapter 11 eventually go on to chapter 7. Quite frankly, I don't see Borders being able to pull itself out of the death spiral it's in. It's too late for it to make a comeback, and there's too much against it.

[TallMomof2]

I'm surprised the one near me is staying open, it never seems busy and the books are pretty shopworn. I only go there when the kids can't find what they want at Books A Million.

[MR. Pockets]

Originally Posted by AnemicOak

For those who have bought eBooks through Borders.com Kobo says they're safe...
http://blog.kobobooks.com/2011/02/16/kobo-update/

I wonder if Kobo's connection to Borders will hurt Kobo (as in scaring people away)?

[Anthem]

Originally Posted by MR. Pockets

I wonder if Kobo's connection to Borders will hurt them (as in scaring people away)?

Certainly can't help...

[shorttimer1]

I agree that it will be virtually impossible for them to ever get back to a profitable company. Most people following them have the same opinion. Too much debt selling a lot of what is going the way of the buggy whip. I remember when Sharper Image filed Chap 11 they would honor gift cards but you had to purchase twice the amount of the gift card. So if you had a $50 GC your purchase had to be at least $100 for them to accept it. So many of the B&M stores are struggling so bad and coupled with all their debt... Sorry, it's just gonna happen.

[bill_mchale]

Originally Posted by MR. Pockets

I wonder if Kobo's connection to Borders will hurt Kobo (as in scaring people away)?

In the near term, I think yes. Most people, I expect, think that Kobo is simply Borders' house brand similar to the Nook with B&N, and that Borders.com is where they need to buy their books.

I think Kobo probably should look at getting their readers into other retailers. If they can sell them for the $99 that Border's is currently selling them for, they might have a chance of building their market share.

I would love to see them become a serious competitor to Amazon. While I love my Sony's, its hard to justify the price of them generally (The PRS-650 was chosen for my wife because I was able to take advantage of their trade in plan plus a sale) and B&N's Nook is pretty much limited to the USA. So I would like a serious global competitor to Amazon to arise.

--
Bill

[bill_mchale]

Originally Posted by queentess

This is correct. Even if they have the cash in hand, they cannot record it as a revenue until the card is spent (which is why many cards have an expiration date). However, Borders is having a cash problem ("liquidity shortfall"), so even if people use their cards (which I did, in case they close the only Borders in my area) it doesn't really help them.

In many respects you are right. That being said, the more revenue they can record, the more likely that they will be able to find creditors who will support their efforts and reorganizing.

One way or the other, I suspect we will know in six months or so if they are successful.

--
Bill

[tubemonkey]

Originally Posted by shorttimer1

So many of the B&M stores are struggling so bad and coupled with all their debt... Sorry, it's just gonna happen.

I just took stock of my spending habits and the only B&M stores I shop at are Costco, Walmart, Best Buy, and my local grocery store. Everything else, I get online.

[Maggie Leung]

Originally Posted by AnemicOak

Here's a sortable chart of the stores being closed...

http://s.wsj.net/public/resources/do..._20110216.html

Thanks for this list. Looks like "my" Borders are staying open for now.

The Borders and B&N closest to me still seem to be doing steady business. I'll keep trying to help prop them up by spending, because I still enjoy bookstores and print books.

[tubemonkey]

Originally Posted by bill_mchale

I think Kobo probably should look at getting their readers into other retailers. If they can sell them for the $99 that Border's is currently selling them for, they might have a chance of building their market share.

Walmart carries the Kobo; but for $129.

[Lastblade]

I like bookstores, even though I only buy magazines these days. Still a sad day when a major chain bookstore goes.

[shorttimer1]

There are a lot of pieces to the puzzle. But I think a big one is a lot of people are truly struggling these days. Most don't buy like they used to and when they do they look for the very best price. Many years ago many of my colleagues would never shop at a Wal-Mart. Today, most do. One told me "After all a buck is a buck." A good friend wanted a book the other day it might have been "Unbroken." Seems like it was $25 or $30 at either Borders or B&N not counting tax. It was $18 at Wal-Mart and she ended up paying $13 shipped to her door for a new book.

Just saying is more and more people are closely watching their purse strings. When you can get books at a library or online for a lot less many people will opt for that option. When times were better many didn't mind spending the extra $$$ to support a local store. You don't find that so much anymore.

Originally Posted by tubemonkey

I just took stock of my spending habits and the only B&M stores I shop at are Costco, Walmart, Best Buy, and my local grocery store. Everything else, I get online.