Last week, I posted about the troubles that Borders bookstores were facing. There were a lot of bad decisions and bad luck that led to their troubles, and the timing of my article was uncanny as they declared bankruptcy just a little more than a week later.
They filed Chapter 11 and as part of their reorganization, announced that they’ll be closing around 200 stores.
Quite honestly, Borders has made such a little impact in my life over the past few days that, when my wife pointed out that the store near us would be staying open, my response was ‘What store?’ There’s a Borders store about a mile and a half from our house, it’s next to the Pet Smart that I visit all the time, yet I completely drew a blank that the store existed.
A reader passed along some information that I thought I’d share with you. She’s friends with a lawyer who has been following the Borders situation for quite some time. The lawyer wrote:
This is a chapter 11 and theoretically Borders will emerge as a company. For the time being they are honoring gift cards. The statement in the story about being unable to do a “pre-packaged” bankruptcy is significant. I think it’s quite likely that Borders will either be taken over by another company, or go into a chapter 7 liquidation and disappear. In the latter case, it’s unlikely that gift cards would still be honored from the date it switches to a chapter 7 (although that would probably be months away). If it were taken over by another company, gift cards might be honored for a period of time. I would use any remaining gift cards immediately.
It’s all just speculation but it’s probably a safe bet either way to spend any outstanding gift cards you have as bankruptcy is always a hazy situation and there’s always some that lose out. To make sure that’s not you, I’d plan on getting some shopping done soon to make sure that you don’t eventually lose out. Especially if your nearest store is one that’s on the chopping block.
What do you think? Is the Borders name destined to go away for good?