Bookseller Borders, which helped pioneer superstores that put countless mom-and-pop bookshops out of business, filed for bankruptcy protection Wednesday, sunk by crushing debt and sluggishness in adapting to a rapidly changing industry, The Associated Press reports. It will close six of its Connecticut stores.
Borders is closing Connecticut stores at The Crossroads At Buckland Hill in Manchester, Westfield Shoppingtown in Milford, Farmington Valley Mall in Simsbury, and the rest in Danbury, Southbury and Wilton.
The chain operates nine Borders and Borders Express stores, and one Waldenbooks store in Connecticut.
The 40-year-old company plans to close about 200 of its 642 stores over the next few weeks. All of the stores closed will be superstores, Borders spokeswoman Mary Davis said. The company also operates smaller Waldenbooks and Borders Express stores.
Borders Group Inc. President Mike Edwards said in a written statement that cautious consumer spending, negotiations with publishers and other vendors and a lack of liquidity made it clear Borders “does not have the capital resources it needs to be a viable competitor.”
Borders plans to operate normally and honor gift cards and its loyalty program as it reorganizes.
The company will receive $505 million in debtor-in-possession financing from Fairfield-based GE Capital and others to help it reorganize.
In January, Borders said it was considering a bankruptcy filing after it received a conditional $550 million loan from GE Capital that required it to secure financing elsewhere.
According to the Chapter 11 filing with the U.S. Bankruptcy Court in the Southern District of New York, Borders had $1.28 billion in assets and $1.29 billion in debts as of Dec. 25.
It owes tens of millions of dollars to publishers, including $41.1 million to Penguin Putnam, $36.9 million to Hachette Book Group, $33.8 million to Simon & Schuster and $33.5 million to Random House.
Activist investor William Ackman, whose Pershing Square Management Co. has a nearly 15 percent stake in the company, also stands to be a big loser.
He offered to finance a $16-per-share Borders-led takeover bid for rival Barnes & Noble in December, but nothing materialized.
The filing was expected, but it is far from clear if it will be enough to save the company.
