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Borders announced today that it has filed for reorganization relief under Chapter 11. The move has largely been expected and along with the reorg, the chain plans on closing 30 percent—or about 200—of its stores across the country.
"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," said Borders Group president Mike Edwards in a statement.
Under Chapter 11, the company has received $505 million in debtor-in-possession financing from GE Capital. The funds will enable Borders to continue to operate.
Also under the plan, pending court approval, Borders will be closing about 30 percent of its most underperforming stores. The closures are expected to happen over the next several weeks, or by the end of April.
Click here for a complete list of the stores slated for closing [pdf].
The company has set up a Web site for more information on the restructuring.
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