Borders files for bankruptcy; fate of local stores unclear

Borders Group filed for Chapter 11 bankruptcy protection this morning, but it’s thus far unclear what will happen to the book-seller’s two local stores. Borders plans to close about 200 of its 642 stores in the next several weeks as it tries to stay afloat in bankruptcy court. The company has stores in Fredericksburg’s Central Park and at Stafford Marketplace. A spokesman for Borders said all the stores that will be closing are superstores, which are defined as stand-alone stores of about 25,000 square feet. He said the company has about 488 superstores total, so just because a location is a superstore doesn’t mean it’s closing. Employees at the two Fredericksburg-area stores said they couldn’t comment on whether they were staying open, but said each location is a superstore.  

The Central Park store is in the same section of the shopping center as a 76,000-square-foot Shoppers Food Warehouse that recently closed. Verizon Wireless also closed its location in that strip and moved into the larger former home of Tweeter. Linens ‘n Things also closed its store in that strip, but that space has since been filled by Hobby Lobby.

Borders has obtained $505 million in debtor-in-possession financing from a group led by GE Capital as it seeks to turn around the business and avoid liquidation. The company has suffered from a heavy debt load and the trend toward electronic books, a business segment Borders entered late. The Ann Arbor, Mich.-based company says the stores that remain open will continue with business as usual during the restructuring period. Another bookseller, Joseph-Beth, filed for bankruptcy protection in November but continues to operate stores including the one at the Village at Spotsylvania Towne Centre.

Check back this afternoon for an update on the local stores.

Permalink: http://news.fredericksburg.com/businessbrowser/2011/02/16/borders-files-for-bankruptcy-fate-of-local-stores-unclear/