Tag Archives: bankrupt

Houghton Mifflin Harcourt Headed Toward Bankruptcy

Many of you may remember Houghton Mifflin as the popular textbook publishing company. But since Education Media and Publishing Group acquired it and Harcourt in 2006 and 2007, the company has been burdened with financial struggles. Now, according to The New York Times, Houghton Mifflin Harcourt has begun a bankruptcy process to eliminate its $3.1 billion of debt.

It’s part of a long-term restructuring plan that would turn its debt into equity. Company officials say the Chapter 11 process will benefit the company in the long run, as Julie Bosman explains.

“By converting our existing long-term debt to equity, we will put HMH in a much stronger financial position for the future,” [Linda K. Zecher, president and chief executive of Houghton Mifflin Harcourt] said in the e-mail, adding that she expected the process to be completed by the end of June.

Zecher promises that business will continue as usual. There are no plans for layoffs, and the process should be completed by the end of June. She says the company still has $135 million in cash on hand for the company’s use.

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Nook Considers Spinoff, Stock Tumbles

Investors are on edge after Barnes and Noble announced last week it was considering spinning off its Nook business.

Nook has been a beacon of hope for the company, whose physical book sales are otherwise plummeting, much like Borders before it went under. But according to this article by The Street, Barnes and Noble officials are hoping that a spinoff would allow the Nook to expand further, both nationally and internationally. B&N CEO William Lynch explains.

“We see substantial value in what we’ve built with our Nook business in only two years, and we believe it’s the right time to investigate our options to unlock that value,” said CEO William Lynch. “In Nook, we’ve established one of the world’s best retail platforms for the sale of digital copyright content. We have a large and growing installed base of millions of satisfied customers buying digital content from us, and we have a Nook business that’s growing rapidly year-over-year and should be approximately $1.5 billion in comparable sales this fiscal year. Between continued projected growth in the U.S., and the opportunity for Nook internationally in the next 12 months, we expect the business to continue to scale rapidly for the foreseeable future.”

The company says there’s no guarantee that the Nook will branch off from B&N and won’t say anything further until a decision is made.

That being said, stocks plummeted when the news broke, which does not bode well should Barnes and Noble decide to spin off the Nook.

As far as  I’m concerned, the Nook will do well no matter where it sells or who owns it. But it’s a matter of how it will affect B&N. Should it spin off, B&N might suffer the same fate Borders did, and that would be a huge loss for readers everywhere.

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Books-A-Million to Take Over Borders Storefronts

In the past, the ongoing bookstore battle always featured the same two players: Borders and Barnes and Noble. Now that Borders has closed its doors, a new storefront will be filling in: Books-A-Million.

According to this article by the L.A. Times, the Alabama-based chain is set to replace 14 of the Borders storefronts throughout the country, including those located in Wisconsin, Iowa, and South Dakota.

In all honesty, it doesn’t sound as though Books-A-Million will be all that different from what Borders did and what Barnes and Noble is still doing. According to this article by the Rapid City Journal, it will still be the home to a number of books, a line of e-books for the Nook, and it will have a coffee shop inside, called Joe Muggs.

It’s good to hear that the Border storefronts won’t go to waste completely. But I do wonder how Books-A-Million will be able to withstand the economic hardship that Borders suffered. If it’s the same thing as Borders was, how does it stand to profit? I’m also curious to know if more Books-A-Million stores will open down the road, if it does well.

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Free Books: Making Good Use of Borders’ Goodies

Though Borders continues to close its doors at hundreds of stores around the country, some have already begun to leave a legacy.

The Borders bookstore in Chicago locked up for good last week, but made one large donation first. According to this article by Huffington Post, the company hired to liquidate the stores, Hilco Trading LLC, donated 8000 books — worth about $130,000 — to Chicago schools.

The Hilco CEO Jeffrey Hecktman says making the donation was an easy decision.

We believe that education, above all other factors, is the foundation of commercial success and so we have decided to do what we can to help ensure American children receive the best education possible. The book donation was only our first step in a continuing commitment to align our corporate resources with the needs of public education.

Included in the donation are books about history, science, math, poetry, business, politics, and travel.

I hope that as more stores close, books are donated nationwide. They may as well make the best of Borders’ dying resources.

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Borders Bust Hurting More Than Just Books

When Borders announced it would liquidate its remaining 400 stores earlier this summer, it was no surprise that it would hurt the book industry. But what some may not have realized is that it also hurts magazines.

As you may recall, there are walls of newsstands filled with magazines inside both Borders and Barnes and Noble. I can remember a number of Friday nights spent with my friends in high school, just flipping through magazines at our local bookstore. We read all the juicy, gossipy ones our parents wouldn’t let us subscribe to.

But among those newsstands are lesser-known magazines — ones like Mother Jones, Witches and Pagans, and Crone. They’re smaller publications that don’t get the popular placement in supermarket checkout lines like People or Cosmopolitan.

According to this article by The News Frontier, with Borders going out of business, these smaller publications are suffering. And they don’t have many other options, as Alysia Santo explains:

She says Borders’ closing leaves her at a huge loss because there are very few outlets interested in stocking magazines which are specifically aimed at “pagans, witches, and goddess worshippers.” “I’m not checkout stand material,” says Niven. “People aren’t necessarily going to want to see a magazine about witches next to their gum.”

Add to that the financial burden of the magazines that don’t get sold before Borders closes, and these publications are already halfway out the door. Now they’re relying almost solely on subscribers.

It’s a sad time for the little guys. Will they ever come out on top?

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Borders is a Bust

All sales are final. As of tomorrow, Borders Bookstore is officially a bust. The once-popular chain will begin closing its remaining 400 stores nationwide, not only emptying shelves, but eliminating 11,000 jobs as well.

This comes after months of bankruptcy and failed attempts to sell and resurrect itself. So where did Borders go wrong?

1. The obvious reason; we are entering the digital world of paperless-ness. In fact, we are already in it. As online [book] shopping, e-readers, and tablets become more popular, the desire to buy a physical book is null and void.

2. As this WSJ article explains, other products in the store were beginning to hide the books altogether. As we all know, bookstores aren’t really just bookstores anymore. They’re fully equipped entertainment outlets, selling CDs, DVDs, and magazines. But once you start shielding the core of the store behind other products, the focus becomes unclear, as Matthew Dolan explains in his article:

Customers began to notice what made Borders distinctive was also disappearing. In Store No. 1, there are still books galore. But to reach them, customers must navigate through aisles of toys, stuffed animals, greeting cards, gift bags, compact discs and DVDs.

3. Barnes and Noble is better. I’ve always been a B&N girl myself. It may be the Starbucks cafe in each store. It might be the layout and look of the store. There’s also a good chance it’s the growth the company has seen after taking on the Nook, which is far more popular than Borders’ Kobo. Either way, it’s the number one bookstore nationwide, and Borders just couldn’t top it.

Whatever the reason, it’s sad to see such a staple leave the industry and say goodbye to thousands of employees, as well. What I’m wondering is, is there something Borders could have done to improve and save itself? What do you think?

***Here is another WSJ article that explains more about the financial struggle of Borders.

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