Borders' stock in downward spiral
The bookstore chain stops making payments to some vendors. Can it survive?
Why? It's not just that the company is delaying payments to some vendors. But that fact, combined with other financial troubles, is giving rise to more fears about bankruptcy.
Borders is in serious debt trouble and is trying to get new financing to avoid defaulting on previous credit agreements, Reuters reports. Now the company has stopped paying some vendors and is trying to restructure other vendor payments.
Barnes & Noble (BKS). Both companies have seen their traditional business slide as consumers have switched to electronic readers and begun buying more books online. (It doesn't help that Kindle books are now lendable; see this Smart Spending post for more.) Post continues after video:
Digital books now make up 8% to 10% of sales at some major publishing houses, The Wall Street Journal reports. Barnes & Noble is the largest bookstore chain in the country, and Borders is No. 2.
With new fears of bankruptcy at Borders, the question now is whether publishers will continue sending books to the chain. One of the vendors being told to wait on a payment is Lagardere SCA's Hachette Book Group, one of the largest publishers in the U.S., the Journal reported.
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