Free Associating About Borders

Nathan Bomey’s column at asks where are the Borders Brothers now that their namesake company is foundering?

I learned from his column that, in the first place, Tom and Louis Borders sold the company to Kmart Corp. almost 20 years ago and have had no role in its management since. In the second place, they rarely make public statements about Borders. So asking such a question is purely a contrivance to fill a column – but intriguing just the same:

As the book store chain that bears their name approaches bankruptcy, brothers Tom and Louis Borders are nowhere to be found.

That’s partly because they left Ann Arbor years ago. Louis is an entrepreneur in Silicon Valley, and Tom is involved in a financial business in Austin, Texas.

The Louisville natives started Borders Book Shop on South State Street in 1971. After Louis developed innovative inventory management software, the company transitioned into expansion mode. In 1992, the brothers sold it to retailer Kmart Corp. and stepped out of management of the company.

At the time, Borders had just 21 stores. Today, the company has 25 times as many Borders stores — an extremely costly footprint that is expected to drive Borders Group Inc. into bankruptcy as early as today.

Reading about the establishment of a Ann Arbor bookstore on State Street in the early 1970s prompted memories of my visits to the city in late 1974/early 1975 when Ross Pavlac and I visited Ro and Lyn Nagey. I seemed to remember that State Street was the setting for Ro to spring a little joke on us out-of-towners when we decided to go out for pizza.

We piled into the car and Ro said he was taking us to Pizza Bob’s – and would we rather go to Pizza Bob’s Uptown or Pizza Bob’s Downtown? I naively asked which was closest and Ro said they were each about the same distance from his house. So I arbitrarily picked Uptown. We went there and had our meal.

On the way out Ro asked, did we all want to walk over and see Pizza Bob’s Downtown? I’m not a great one for hoofing around town after I’ve just eaten but that hasn’t kept me from being roped into any number of fannish expeditions and I saw it was about to happen again. Ro led off. Then after taking only a few paces he suddenly stopped. And as proud as if he had arranged it himself he waved to the sign over the nearest building: Pizza Bob’s Downtown was just two doors away.

I checked online and was pleased to see Pizza Bob’s still exists at 814 S. State St., though apparently this was the “Downtown” location because Pizza Bob’s “Uptown” site has gone away.

Learning that the pizza place was in the 800 block of State Street I could see I was never terribly close to any of Borders’ early locations in the 200 and 300 block, and if we even drove past it would have been merely another one of Ann Arbor’s many bookstores.

[Thanks to Andrew Porter for the link to Bomey’s column.]

Pizza Bob’s Uptown

Borders Files for Bankruptcy

Borders filed Chapter 11 bankruptcy today, February 16, reports the Associated Press:

The company will receive $505 million in debtor-in-possession financing from GE Capital and others to help it reorganize…

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.

Borders Writing the Next Chapter — Eleven

Borders could file bankruptcy early next week reports the Wall Street Journal:

Borders Group Inc. is in the final stages of preparing a bankruptcy filing after failing to persuade publishers and others to go along with a plan to refinance the troubled bookstore chain’s debt….

Borders has spent recent days finalizing a deal for so-called debtor-in-possession financing that would keep the company operating while under bankruptcy-court protection, the people said. The company is hearing pitches from Bank of America Corp. And General Electric Co.’s finance arm for $450 million in financing…

By filing a Chapter 11 bankruptcy with this financial support Borders could continue operating and move forward with its plan to close 200 stores and cut thousands of jobs.

[Thanks to Michael J. Walsh for the story.]

Vendor Writes Off Borders Bad Debt

Academic publisher John Wiley & Sons announced in a February 4 filing with the SEC that it will record a $9 million bad debt expense in connection with Borders Group Inc. based on the current status of business and also the potential future adverse financial events that may affect it.

Wiley’s professional/trade brands include For Dummies, Frommer’s, Webster’s New World, Jossey-Bass, Pfeiffer, CliffsNotes, Betty Crocker, Wrox Press, J.K. Lasser, Sybex, Fisher Investments Press, and Bloomberg Press.

[Thanks to Michael Walsh for the story.]

Borders Gets a Gasp of Air — Its Last?

Borders Group, which has been shedding executives and employees while shuttering stores, received a new credit line to keep it going — yet doesn’t preclude a possible bankruptcy reports the Associated Press:

Borders Group has received a commitment for a $550 million credit line from GE Capital, a lifeline that will help the struggling bookseller pay its vendors and stay afloat — but it indicated that bankruptcy protection might still be an option.

[Thanks to David Klaus for the story.]

Bookmakers Bet Against Bookseller

John Mansfield sends a link to TeleRead’s “A Run on the Borders” reporting new symptoms of the bookseller’s failing condition:  

A few days ago, I mentioned Borders’s financial problems—it had to delay payments to some publishers because it needed all the cash on hand it could keep as it was trying to refinance its debt after a new appraisal reduced the value of its assets. Now Galleycat reports that two of Borders’s executives have resigned: executive VP Thomas D. Carney and CIO D. Scott Laverty have both stepped down.

One big publisher has stopped shipments to Borders according to Publishers Weekly.

“So the race is on,” says John. He asks, “Who collapses first, Borders/Chapters/Barnes & Noble??”

Is Borders Circling the Drain?

Borders Group Inc. shares dropped more than 15 percent overnight on December 30 in response to reports that America’s second-largest bookseller has delayed payments to some of its vendors in order to conserve cash while struggling to refinance its debt.

Borders has been reporting losses for years, but its results worsened in recent quarters with heightened competition from Barnes & Noble and larger merchants including Inc., Wal-Mart Stores Inc. and Target Corp. The growing electronic book market is another challenge, although Borders has jumped into that realm, launching its e-bookstore over the summer and adding services to its website during the third quarter.

Borders is closing 16 stories. There is no assurance that any refinancing will come through. Borders has announced that it could violate terms of its debt in the first quarter of 2011 and “experience a liquidity shortfall.”

Which reminds me of Bob Shaw’s line about a company trying to market a ship that took “unplanned depth excursions.”

[Thanks to John Mansfield and David Klaus for the story.]

Update 12/31/2010: While out driving I realized I could use Google Ngram to test whether Bob made up that expression or appropriated it. The answer: a bit of both.  “Depth excursion” has been a term of art for underwater exploration since the 1960s, but Ngram returned zero hits for “unplanned depth excursion.”