BORDERS BOOKSHOP BANKRUPTCY

Borders Bookshop Bankruptcy

Abstract

In this study we try to explore the reasons behind the bankruptcy of Borders Bookstore in a holistic context. It gives the overview regarding the Borders bookstore history, competitors and gives an overall snapshot. The research also analyzes many aspects of the bankruptcy and tries to evaluated and then suggest an alternate strategy.

Contents

Headquarters and Settings4

Chief Executive Officer4

History of Borders and Background5

Competition7

Causes of Bankruptcy8

Ethical Standards9

Contributing Factors10

Alternative Plans of Action11

Evaluation11

Conclusion13

Reference14

Borders Bookstore's Bankruptcy

Headquarters and Settings

Borders Group is a book, music and movies supermarkets, shopping malls bookstore operators. In the January 30, 2010, the company operated 511 supermarkets under the name of the border, including in Puerto Rico, three in the United States, 175 shopping mall-based and other small including the Waldenbooks. In addition, the company owns and operates in the UK with the name Paperchase Products Limited as designers and stationery, greeting cards and gift retailer. The company also established a proprietary e-commerce site, www.Borders.com. The trademark includes: Borders ®, Borders bookstores and bookstores Music ®.

Chief Executive Officer

Bennett LeBow is the chairman and Chief Executive Officer of Borders Group. LeBow is from Philadelphia, graduating in 1960 with a Bachelor of Electronic Engineering, Drexel University. LeBow continued with the graduate school at Princeton University.

History of Borders and Background

Incorporated in Delaware on Aug. 9, 1994. Subsequently reincorporated in Michigan.

On Oct. 30, 1992, Kmart acquired Co. in a stock-for-stock exchange in which Kmart issued 784,938 shares of Kmart convertible preferred stock in exchange for all outstanding Co. shares.

On Sept. 1, 1994, Co. acquired all of the outstanding capital stock and related options and warrants of CD Superstore, Inc. for $12,300,000 in cash and 321,938 shares of Co.'s Series A Preferred stock, valued at $5,200,000. CD Superstore, Inc. was then renamed Planet Music, Inc.

In June 1997, Co. acquired Library, Ltd, The (Inc), Saint Louis, MO. Terms of the deal, effective July 1, 1997, were not disclosed.

In Mar. 1999, Co. purchased All Wound Up for a purchase price of $19,700,000.

In June 1999, Co. acquired a 19.9 % stake in Atlanta-based Sprout Inc. Terms were not disclosed.

In Jan. 2001, Co. discontinued the operations of All Wound Up, a seasonal retailer of interactive toys and novelty merchandise.

In July, 2004, Co. invested cash of $24,100, including debt repayment of $4.1, in connection with an increase in its 15% equity stake in Paperchase Products, Ltd.

In Nov. 2007, Co. purchased an additional 0.5% interest in Paperchase Products, Limited from the minority owners for cash consideration of $800,000.

On June 10, 2008, Co. sold all of the outstanding shares of Borders Australia Pty Limited, Borders New Zealand Limited and Borders Pte. Ltd. to companies affiliated with A&R Whitcoulls Group Holdings Pty Limited, for a cash payment of $97,300,000 at closing, a deferred payment of $3,300,000 payable on or about Jan. 1, 2009, and a deferred payment of up to $6,500,000 payable on or about Mar. 31, 2009.

On Jan. 31, 2009, Co. purchased the remaining 3% ownership interest in Paperchase Products Limited, bringing its ownership interest to 100%, for ...