When US President Obama has submitted budget proposals to bring back the economy on rails, Borders Books, the second largest US book retailer has filed for chapter 11 bankruptcy. The Border Group has also announced that they are going to close down 200 stores across the nation and there will also be massive laying down of staff.
The Borders bankruptcy came as a shock to the book lovers as the book store was famous for selling books for decades. The company officials said that Border Books was forced to take this decision as there was a massive slow down in customer spending and sales were going down with every passing month.
At present, the Borders Books has got 659 stores and have got 20,000 workers in their payroll. Out of them, 13,000 are part time ones and rest 7000 employees are part time ones. As a result, the working capital of the company dried out and the banks are also tight in funding trends. As per results declared by the Wall Street, banks are also not in a comfortable position to fund long term businesses.
Business experts feel that the Borders bankruptcy decision was a mature one and it will help the company to reorganize itself in the long run. Borders management also said that they have received a commitment of $505 million from GE Capital Restructuring Finance Division.
The closing of the stores by Borders Books have come as a positive opportunity for growth by the rival bookstores including Barnes and Noble, Inc. and Books-A-Million Inc, etc.