DeKalb Borders store to close; company files for bankruptcy

The Borders store in DeKalb is slated to close after the 40-year-old bookstore company filed for bankruptcy Wednesday.

The store at 2520 Sycamore Road in DeKalb is among 200 scheduled to close by Borders, according to documents filed with the U.S. Bankruptcy Court in New York.

When reached Wednesday, a Borders employee at the DeKalb store referred all media calls to the store's home office. A spokesman there said a closing date was not yet known.

"The closure should be completed over the next several weeks," Borders spokesman Donald Cutler said. "We'll have a better idea of concrete dates as the Chapter 11 process moves forward."

The DeKalb Borders opened in Northland Plaza shopping center in November 2001, a month before its competitor, Barnes & Noble, announced it was opening a new store on the other side of Sycamore Road. The two major booksellers have co-existed across the road from one another since Barnes & Noble opened in April 2002.

"It's very disappointing," DeKalb Mayor Kris Povlsen said of Borders closing. "But it's not really surprising when you think of the entire print media having to reinvent itself. People are reading online, using their Kindles and a variety of other ways of getting information other than books."

The company said that it would operate its remaining stores as usual, that it would continue to honor gift cards and loyalty programs and that its inventory still would be available at www.Borders.com.

The move comes after months of back-and-forth debates with creditors over potential plans to sell or save the company. According to the Chapter 11 filing, Borders had $1.28 billion in assets and $1.29 billion in debts as of Dec. 25.

It owes tens of millions of dollars to publishers, including $41.1 million to Penguin Putnam, $36.9 million to Hachette Book Group, $33.8 million to Simon & Schuster and $33.5 million to Random House.

It's significant that Borders could not reach an agreement with creditors and file a "prepackaged bankruptcy," said Nejat Seyhun, a bankruptcy expert at the University of Michigan.

It could be a sign that creditors do not believe Borders will be a "viable operation going forward," Seyhun said.

The filing was expected, but it is far from clear if it will be enough to save the company.

"They are going to have to be an entirely different company than the one that went into bankruptcy protection if they want to emerge successfully," said Jim McTevia, managing partner of turnaround firm McTevia & Assoc.

The company has 642 stores nationwide. It said that clearance sales at stores slated to close could begin this weekend.

Povlsen said he is hopeful that once Borders does close, the building will not stay empty for long.

"What we have seen in the last year or so is that as buildings vacate, someone's coming right in," he said. "There's a market here in DeKalb for new retail establishments."

• Shaw Suburban Media reporter Chris Freeman and wire reports contributed to this report.