Borders Inches Ever Closer to Bankruptcy

A rapidly vanishing sight

According to the Wall Street Journal, Borders is finally taking the initial steps to full-fledged bankruptcy.  After months of warning the market and watching its stock freefall into penny stock territory (a mere 25 cents a share as of publishing time), Borders announced it could file for Chapter 11 bankruptcy as soon as Monday.  It's expected that Borders will be closing a third of their stores as it seeks to restructure its debt and find some way to stay afloat in a world where physical media is becoming increasingly irrelevant.


Market realities aside, it's important to ask how Borders got to this place in the first place.  According to sources as the WSJ, Borders is expecting to show north of a $1 billion dollars in liabilities.  That's one BILLION dollars.  Roughly equivalent to half of Borders' yearly revenue in their last fiscal year.  Once it hits the fan, it's going to be very interesting to see where the blame falls for such gross fiscal mismanagement.  It also doesn't help that Borders has inexplicably resisted the march towards digital media as a sales platform.  While Amazon, Apple, Barnes & Noble, and others have capitalized on the advent of new technology, offering their own e-readers and establishing built-in sales platforms for e-books, Borders has all but ignored this trend and done its best to cling to tired business models while sticking its fingers in its ears to drown out the chorus of people urging the bookstore giant to reinvent itself.

What does this mean for comics?  After all, large-chain bookstores do account for a good amount of comic sales, moreso in the trades department than in the monthlies, but it's curious to see how this will affect the smaller publishers.  Some have speculated that the smaller publishing houses such as Bluewater, Aspen, or 12-Gauge could possibly not survive a collapse by Borders.  Indeed, with Diamond already stopping shipments to Borders in mid-January, the next few months could decide the fate of some of these publishing houses.  While I don't doubt that no more Borders will hurt the Big Guns (Marvel, DC, IDW, Dark Horse, Image), it's generally accepted that they will be able to navigate this storm with relative ease.

The next few months should be very interesting indeed.  I wish the best of luck to Borders and its employees in the rocky months ahead.