Book store company Borders, is facing an uncertain future as they struggle to compete with the likes of Amazon who are selling hard copy books and eBooks in the millions to consumers around the world including Australia.
At the weekend Borders, which has struggled with the long-term shift towards digital sales admitted that they are poised to declare themselves bankrupt after failing to reach a deal with bankers over liabilities of more than $1bn.
Shares in Borders dived 32% on Wall Street on Friday as reports emerged of a chapter 11 bankruptcy filing. The group that has 674 US stores employing 19,500 people comes 14 months after Borders’ UK arm went bust, with a loss of 1,100 jobs.
It is not known whether Border’s Australian operations will be affected.
In Australia several bookstores are struggling as consumers move to eBook readers such as Amazon’s Kindle or the iPad. This year at least 40 new tablets that offer eBook reading capability are set to be launched with Amazon recently reporting that eBooks are already outstri8ppingt hardback book sales.
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.