"Borders has obtained court approval of its store-closing plans and has begun liquidating inventory at the 200 affected locations. DJM Realty is assisting with the store closings and lease assignments. The store closings are part of the restructuring Borders is undertaking under Chapter 11 bankruptcy protection.
Inventory liquidation on site, if successful, will reduce the amount of inventory publishers, wholesalers, and distributors can expect to get back as returns as Borders closes nearly 1/3 of its stores. Whether that’s good or bad for the individual company varies, depending on whether the receivable risk resides in the various relationships."
The Borders here in Winchester (VA), the only real bookstore in our town of 28,000 residents, is one of the stores that is on the chopping block. It's also the only retail location in our town that had any real selection of manga, so unless we decide to open an RACS retail store* here, manga fans in our area will be relegated to mail order only.
All the manga publishers and distributors are going to take big hits in varying degrees due to the Borders bankrupcy. Word on the street is that they owe Diamond Comics $3.7 Million for the few TP lines they distribute directly to the bookstore trade. Viz and TokyoPop are too small to distribute directly and thus go through middlemen to get their manga into the bookstore market, so it's hard to know the level of financial hit they are going to take, only that they are unlikely to ever see whatever monies Borders owed them at the time of the bankrupcy filing.
Borders isn't the only one having problems keeping the doors open though. The other big bookstore chain, Barnes and Nobel, has suspended the dividend to their shareholders to conserve capital:
"Barnes & Noble announced that it has eliminated its dividend to conserve capital; and will no longer give guidance for the current year, citing Borders’ Chapter 11 filing “and the potential short-term impact that their announced store closures may have in the marketplace.”
The dividend cut will allow the company to conserve capital 'to continue investing into its high growth digital strategies, while simultaneously allowing the company to take advantage of any other market opportunities that may present themselves.'"
You would think that Borders going away could only be a net positive for B&N, but they clearly have their own problems too. No matter how they 'spin' suspending their dividend to the media, that's a huge negative signal that they are not doing well cash flow wise.
Even Best Buy is no longer the shining star of entertainment retailing as can be noted here and here. The bankrupt video rental chain Blockbuster is in the process of auctioning off their worthless assets.
Any way you cut it, being a Brick and Morter retailer in the entertainment business is a tough proposition these days. Online and digital is the future.
*The prospects for an RACS retail store are unlikely. Sorry folks, I already have 2,000 headaches. Anyway, if we ever do open a big Anime retail store, it will be in Grimes, Iowa. -_^
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→Borders Store Liquidations Underway / Barnes & Nobel Suspends Dividend
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