Bankrupt bookstore chain Borders has two possible bidders but may still have to close 51 more stores, including some of its most profitable locations, Bloomberg reports. Borders does not want to close the stores but says that if it doesn’t, it risks defaulting on the $505 million loan it took out from GE to cover expenses when it filed for bankruptcy in February.
The stores that would have to be closed would include the Borders stores at NYC’s Penn Station and JFK International Airport and Boston’s Downtown Crossing.
“I was just told yesterday,” Downtown Crossing store manager Don Durica told the Boston Herald. “It’s just unbelievable and a real blow for Downtown Crossing.”
Borders is faced with a “Hobson’s choice,” Borders lawyers wrote in court documents filed this morning: “The debtors can proceed with store-closing sales at these stores under these unfortunate circumstances or, if they refuse to do so, risk being placed into default.”
A Borders spokeswoman told the WSJ, “While the motion references 51 store locations, we expect a far smaller number to actually close.”
Borders has closed 237 stores since filing for bankruptcy, and 405 remain. The Gores Group and Najafi Companies have expressed interest in buying the company’s 265 superstores, which include some of the locations that would be closed.
The company has asked its lenders for a grace period until a hearing in mid-July, when it will seek a sale of the entire business.