Hobart Borders to close as company files for bankruptcy
Borders is closing about 200 of its 642 stores in the next few weeks, including its Hobart location, after filing for bankruptcy Wednesday.
The Borders location at Westfield Southlake mall in Hobart is among those slated to close, according to a list posted on the company website.
“As part of the filing, Borders plans to take a store reduction program, which this store is a part of,” company spokesman Donald Cutler said.
The company took into account economic conditions, cost structures and each location’s viability when it was deciding which stores to close, Cutler said.
The bookseller has struggled with crushing debt and sluggishness in adapting to a rapidly changing industry.
“We do appreciate the loyalty of our customers over the years and look forward to welcoming them into the stores that remain part of the community in general and also online at Borders.com,” he said.
“Over the next several weeks, (the closings) will take place, and customers can continue to use their gift cards and coupons as usual in all the stores.”
Shoppers at the Hobart Borders were surprised Wednesday when they learned of its impending closure, which comes just a few months after another major bookseller, Barnes & Noble, closed its doors across the street in Hobart.
Brian McGue, of Chesterton, said he was surprised because “bookstores always seem busy.”
McGue usually shops at the Barnes & Noble store in Valparaiso but feels for people who frequented the Hobart Barnes & Noble store and now will lose the Borders at Southlake mall.
“It’s a shame,” he said. “It’s entertainment for us to take our kids to the Barnes in Valparaiso on a Friday night. It’s like Disney World to them.”
Valparaiso University student Amanda Boulton learned about the closing after buying some items at the store. She said it was a shame, especially after losing the Barnes & Noble store across the street.
“Not many department stores carry books,” she said.
The store’s management referred calls to its corporate headquarters.
The closure list also includes Borders locations in Mishawaka, West Lafayette, Carmel and Indianapolis in Indiana and 16 locations in Illinois including Matteson, Orland Park and five in Chicago.
The location in Highland was not on the list.
Borders Group Inc. President Mike Edwards said in a written statement that cautious consumer spending, negotiations with publishers and other vendors, and a lack of liquidity make it clear Borders “does not have the capital resources it needs to be a viable competitor.”
At its peak in 2003, Borders operated 1,249 stores under the Borders and Waldenbooks names, but now it operates barely half that. Its annual revenue has fallen by about $1 billion since 2006, the last year it reported a profit.
The company will receive $505 million in debtor-in-possession financing from GE Capital and others to help it reorganize.
In January, Borders said it was considering a bankruptcy filing after it received a conditional $550 million loan from GE Capital that required it to secure financing elsewhere.
According to the Chapter 11 filing with the U.S. Bankruptcy Court in the Southern District of New York, Borders had $1.28 billion in assets and $1.29 billion in debts as of Dec. 25.
The Associated Press and Times staff writer Bowdeya Tweh contributed to this report.