Borders expected to file for bankruptcy soon

The Wall Street Journal reports anonymous sources tell them that Borders is about to file for Chapter 11 bankruptcy, and indeed could make the filing as soon as today (though Borders itself refused to comment on the matter yet). One paragraph in particular of the report reads like an epitaph:

Borders’s finances crumbled amid declining interest in bricks-and-mortar booksellers, a broad cultural trend for which it offered no answers. The bookseller suffered a series of management gaffes, piled up unsustainable debts and failed to cultivate a meaningful presence on the Internet or in increasingly popular digital e-readers.

Reportedly it will seek to close 1/3 of its 674 stores, and lay off large numbers of staff. However, whether it even can reorganize itself and avoid liquidation is unclear. The sources report it will declare over $1 billion in liabilities, and the article quotes Mike Shatzkin (no stranger to these pages) as suggesting that brick-and-mortar shelf space for books will be half-gone within 5 years, and 90% gone within 10.

Publishers who Borders owes money are not going to be thrilled about this, and Borders shareholders are going to take a big hit as well. It will also likely result in much of Borders business migrating to other retailers and e-tailers such as Amazon or Barnes & Noble. The article doesn’t mention what, if anything, this will mean for users of the Kobo e-readers that Borders sells.

(Found via Galleycat.)