Fri 18 September 2020
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Borders poised for bankruptcy in US
Bookstore chain whose UK arm went bust at the end of 2009 will bid to renegotiate debts in US under chapter 11 protection

Stricken US bookseller Borders, which has struggled with a long-term shift towards digital sales in the publishing industry, is poised to declare itself bankrupt after failing to reach a deal with bankers over liabilities of more than $1bn (£625m).

Shares in Borders dived 32% on Wall Street on Friday as reports emerged of a chapter 11 bankruptcy filing as early as or Tuesday. The prospect of insolvency at the chain, which has 674 US stores employing 19,500 people, comes 14 months after Borders' UK arm went bust, with a loss of 1,100 jobs.

Bookshops have found trading tough as readers shun high-street stores in favour of buying online or purchasing digital books for handheld readers such as Amazon's Kindle or Apple's iPad. HMV, the owner of Waterstone's, sounded a profits warning last month and is facing possible break-up bids.

Borders, founded in 1971 by two Michigan brothers, Tom and Louis Borders, has missed payments to landlords and publishers. Under the oversight of a bankruptcy judge, it will try to renegotiate its debts. But the company is tipped to shut at least 150 of its stores. Big potential losers include prominent Wall Street hedge fund manager Bill Ackman, whose Pershing Square Capital is one of the chain's top investors.

The Guardian