Liquidity Issues at Borders Bookstore
Even as Borders announced today that it is borrowing $42.5 million from its largest shareholder, the bookstore chain's Brentwood outpost, which has been facing liquidity problems of its own -- namely a ruptured water main -- will reopen in early to mid-May.
"We announced our intention to seek strategic alternatives to fund our business growth in the long term," she writes in an e-mail.
Pershing Square Capital, a hedge fund, is Borders' largest shareholder. In addition to the loan, it has offered $125 million for Borders' UK, Australia, New Zealand and Singapore divisions, as well as the Paperchase stationery store.
Borders has until January 15, 2009, to make a final decision whether to sell to Pershing or another buyer, or not at all.
Meanwhile, work continues at the Brentwood store, which has been closed since a water main broke at approximately 3 a.m. on February 14, flooding the first floor. A notice on the door encourages customers to go to other local Borders stores, but the closest bookstore, the Ladue Barnes & Noble, reports an increase in business and recently extended its hours to match those of Borders. It has not, unfortunately, added any more comfy armchairs, which was a prime reason to read, er, shop at Borders in the first place.