Lots of questions, will the online site continue to run, when will stores close, etc
Here’s the letter from the CEO:
BANKRUPT BORDERS CEO’s Letter to Customers
February 16, 2011
Dear Valued Customers:
For generations, Borders stores have been beacons of enlightenment and education, where readers young and old can explore their passions and find that special book that speaks to them personally. As Borders moves forward, our commitment to you is to be a best-in-class book seller — whether in our stores or on
Borders.com — where you can purchase books and other related products that stimulate, and in turn, satisfy your reading interests.
However, in light of the ongoing impact of the difficult economy of the past few years and the rapidly changing retailing environment for books and related products, it is essential that Borders restructure itself so it can be viable and reposition its business to be successful over the long term. We determined that the best path for Borders to have the ability to achieve this reorganization is through the Chapter 11 process, which Borders commenced February 16. Among our goals under this process are: putting in place a sound financial structure, enhancing Borders’ technology to better benefit our customers, continuing to make
available a highly attractive Borders Rewards program, and introducing new and exciting products related
to our book offerings — all while providing you great customer service .
Throughout this process, we want you to know that:
* Borders stores are open for business. Borders pioneered the in-store experience, providing customers with a vast assortment of books in a warm and relaxing environment — and we intend
to build on this. Our stores will continue to be community gathering places where families can gather to enjoy enriching events including author readings and signings, book clubs as well as kids’ storytime and parties.
* Borders.com is operating as usual. We are fulfilling online orders as customers choose from
among millions of books, music, movies as well as other entertainment items.
* Our Borders Rewards programs, including Borders Rewards Plus, remain in effect. Customers can continue to earn and redeem their Rewards in stores and on Borders.com and they’ll also continue receiving coupons. As always, we are honoring gift cards, which can be redeemed in stores and online at Borders.com.
* Borders will continue to maintain its strong national presence. Our nationwide network of stores is foundational to the Borders brand. Borders, however, will be closing underperforming
stores within our network over the next several weeks. Should your local store be affected, please visit Borders.com to find another Borders store near you, or to purchase from our vast selection of
books and other merchandise on-line.
We are committed to Borders being the destination of choice for our customers across the country for years to come. Thank you for your support and continued loyalty.
Sincerely,
Mike Edwards
President and CEO, Borders, Inc.
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issue. Newsletters are delivered via e-mail; invoices, transmitted
following publication of each newsletter issue, arrive by fax.
Re-mailing of BORDERS GROUP BANKRUPTCY NEWS is prohibited.
Borders Group Files for Reorganization Relief Under Chapter 11
Secures Commitment for $505 Million in Debtor-in-Possession Financing
Borders to Continue to Conduct Business in Ordinary Course
Chapter 11 Provides Borders with Best Route to Reorganize and Reposition Company for the Long-TermANN ARBOR, Mich., Feb. 16, 2011 /PRNewswire via COMTEX/ —
“It has become increasingly clear that in light of the environment of curtailed customer spending, our ongoing discussions with publishers and other vendor related parties, and the company’s lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor and which are essential for it to move forward with its business strategy to reposition itself successfully for the long term. To position Borders to remedy this condition, Borders Group, with the authorization of its board of directors, has filed a petition for reorganization relief under Chapter 11 of the Bankruptcy Code. This decisive action will give Borders the opportunity to achieve a proper infusion of capital in order to have the opportunity to have the time to reorganize in order to reposition itself to be a successful business for the long term,” said Mike Edwards, Borders Group President.
“In this regard, operating under Chapter 11, Borders has received commitments for $505 million in Debtor-in-Possession (DIP) financing led by GE Capital, Restructuring Finance. This financing should enable Borders to meet its obligations going forward so that our stores continue to be competitive for customers in terms of goods, services and the shopping experience. It also affords Borders the opportunity to move forward in implementing the appropriate business strategy designed to reposition Borders to be a potentially vibrant, national retailer of books and other products,” Mr. Edwards emphasized.
The company said that it is serving customers in the normal course, including honoring its Borders Rewards program, gift cards and other customer programs. Additionally, the company expects to make employee payroll and continue its benefits programs for its employees.
Borders said that it has many strengths upon which to build a solid plan of reorganization and implement a new business model for Borders to address the changing needs of the American reader. “For decades, Borders has been a beacon of engagement – a highly frequented destination for consumers and a significant venue for authors and vendors to showcase new books and merchandise. We have the ability, based on our brick and mortar presence nationally; the on-line capabilities we have in place; the loyalty of, and access to, our customers; and the products and services we offer to be an important and easy access destination of exploration and purchase for readers across the country,” commented Mr. Edwards.
The company noted that, among other initiatives and subject to court approval, Borders plans to undertake a strategic Store Reduction Program to facilitate reorganization and its repositioning. Borders has identified certain underperforming stores — equivalent to approximately 30 percent of the company’s national store network — that are expected to close in the next several weeks. At the same time, the company noted that a major strength of Borders is its national presence, and its extensive network of remaining stores as well as Borders.com, will continue to run in normal course. The company emphasized that the closings were a reflection of economic conditions, cost structures and viability of locations, among other factors, and not on the dedication and productivity of the workforce in these stores.
“We are confident that, with the protection afforded under Chapter 11 and with the support of employees, publishers, suppliers and creditors, and the reading public, a successful reorganization can be achieved enabling Borders to emerge from the process as a stronger and more vibrant book seller,” concluded Mr. Edwards.
“We are very pleased to be able to make this commitment to Borders as support for their plan to re-organize the company,” said Tim Tobin, Managing Director, Retail Restructuring, GE Capital, Restructuring Finance.
The Chapter 11 petition for relief was filed in the U.S. Bankruptcy Court, Southern District of New York. Completion of the company’s DIP financing arrangements is subject to approval of the Bankruptcy Court and the satisfaction of certain conditions provided in the financing commitments received by the company from the lenders providing such financing.
Additional information about the reorganization is available at www.bordersreorganization.com or by telephone at (877) 906-7675.
