LIHU‘E — The nation’s second-largest bookseller announced Thursday that it has filed for Chapter 11 bankruptcy protection, the result of poor sales, financial losses and outstanding debts. As part of Borders Group’s bankruptcy reorganization process, the chain plans to close
LIHU‘E — The nation’s second-largest bookseller announced Thursday that it has filed for Chapter 11 bankruptcy protection, the result of poor sales, financial losses and outstanding debts.
As part of Borders Group’s bankruptcy reorganization process, the chain plans to close 200 of its 642 bookstores and lay off 6,000 of its 19,000 employees.
The Borders bookstore in Lihu‘e’s Kukui Grove Center is one of the locations set to close down, putting more than 40 employees out of work.
Rumors of the troubled book giant’s impending bankruptcy have been circulating for months, but Wednesday’s news still took Lihu‘e Borders General Manager Helaine Perel by surprise.
“I only found out this morning,” she said, “so I’m still in shock.”
As to why the Lihu‘e location was chosen for the chopping block, Borders Group spokesman Donald Cutler said, “It’s part of the strategic store reduction program, and is a reflection of their cost-structure strategy.” He said dates for closures have “not been set quite yet; however, it will begin in a few weeks.”
A company statement atop a list of impacted locations says selected stores are expected to close by the end of April. Once the Lihu‘e location closes, Talk Story, a used-book shop in Hanapepe, will be the only remaining bookstore on Kaua‘i.
Holding back tears, store manager Niki Griswold said, “Our second customer in today was local author David Penhallow, and he was just devastated when he heard.”
Griswold had been optimistic Wednesday when asked whether her store might be in jeopardy if Borders Group filed for bankruptcy.
“We received our occupancy permit 16 years ago today,” said Perel, who has been the store’s general manager since it opened. “This Borders is more than a store. It’s a community place where we have introduced children to reading and to books. What are kids going to do?”
Perel said business at the bookstore has been declining in recent years and attributed it primarily to the economy and local furloughs.
Someone from Borders Group corporate office will be sent to talk to employees, she said, one of which has been with the company for 25 years.
Bill Grier at Workwise Kaua‘i, the county’s Workforce Development Division office, called Perel and offered to set up a workshop.
“The fact that Workwise called and reached out to us is such a blessing,” she said. “Kudos to them . . . My employees are funny, witty and intelligent. If you can help them, please contact us.”
The Crossroads Center location in Kailua-Kona is also on the list of stores set to close.
Borders is a 40-year-old chain that helped define the age of the book superstore, states an article in The New York Times. It called the bankruptcy a widely expected move after years of increased competition, declining sales, over expansion and a general failure to keep up with an evolving retail climate, including big-box stores and online book technology.
Borders, which entered the marketplace in 1971 as a used bookstore in Ann Arbor, Mich., holds $1.29 billion of debt and $1.27 billion in assets. It owes $178.8 million to vendors and publishers, and $18.6 million to landlords, according to the article. Publisher Penguin Putnam alone is owed $41.1 million.
A complete list of Borders’ store closures nationwide may be found at bordersreorganization.com/Reorganization_Closure_List.pdf.
Borders Group has retained DJM Realty to manage the disposition of the properties.
