Borders Filing for Bankruptcy; Knoxville Locations to Remain Open

There's good news for Knoxville readers this morning - that is, if you're inclined to look for the small silver lining under a large dark cloud - and one that might only be temporary at that.

Finally, it strikes me that about 20 percent of Borders' total debt -- and the bulk of its unsecured debt -- is owed to trade creditors, namely publishers.

Normally you want to enter Chapter 11 with the important trade debt paid down, setting the stage for a good working relationship during the case. That Borders did not or could not achieve this before filing might indicate that this case could be somewhat more contentious than most.

A strained relationship with the publishers is hard to fit with a fast exit from Chapter 11.

And as the Wall Street Journal points out:

Perhaps most worrisome now is that Borders has failed to develop a successful digital strategy at a time when e-books are the fastest growing segment of the publishing business. Although Borders launched its own e-book store last summer, it is powered by a Kobo Inc., a Toronto-based e-book retailer in which Borders has an investment stake. Borders sells Kobo's e-book reader, but Borders lacks its own proprietary device.

By contrast, Barnes & Noble has captured an estimated 20% of the e-book market today, in large part by successfully promoting its own Nook e-book readers in its stores. The devices have proven a significant advantage for the nation's largest bookstore chain as measured by revenue as it adjusts to the ongoing digital transformation. Barnes & Noble put itself up for sale last August, a process still underway.

But this isn't about the books. It's about the bookstores.

Many have torn their hair, beaten their breasts, and keened about the demise of independent and used bookstores. That old man who comes and sifts through the remainders with an air of knowledge, or the flannel-clad hipsters talking about how they were into Melville before he sold out, or the woman with a lot of bags who organizes poetry readings -- these familiar sprites of the indie bookstore scene come to us in the middle of the night to show harrowing visions of a world where they no longer exist. Although that could have been something I ate.

But nobody has stuck up for the megastores.

I'll go ahead and admit it - I really like Borders. When I lived in Athens for five years, there was no independent (new) bookstore. It was Barnes & Noble or Borders, and I generally chose the latter, because I knew I'd be more likely to find (slightly) obscure books there. I mean, they actually had a "Graphic Novel" section (even if it was all manga). So I'll be keeping my fingers crossed for the impossible - and in the meantime I'll probably be making a few trips to Borders to spend money I shouldn't have on more books I don't have room for.