Bankrupt Borders Closes 4 MN Stores, 124 Lose Jobs
Four Minnesota Borders locations-St. Paul, Maple Grove, Richfield, and Minnetonka-will be closing their doors over the next several weeks as the company reorganizes under Chapter 11 bankruptcy protection.
About 6,000 employees-including 124 in Minnesota-will be affected by the closures, which account for about 30 percent of the company's network of stores.
The company said that the store closures were “a reflection of economic conditions, cost structures, and viability of locations, among other factors, and not on the dedication and productivity of the work force in these stores.”
Ann Arbor, Michigan-based Borders filed for Chapter 11 protection on Wednesday in U.S. Bankruptcy Court in New York. In its filing, it claimed assets of $1.28 billion and debt of $1.29 billion.
Borders said that it has received commitments of $505 million in debtor-in-possession financing led by Norwalk, Connecticut-base GE Capital.
“This financing should enable Borders to meet its obligations going forward so that our stores continue to be competitive for customers in terms of goods, services, and the shopping experience,” Mike Edwards, Borders' president, said in a statement.
There are three other Borders locations in Minnesota-Coon Rapids, Roseville, and Woodbury-that will remain open. Borders' downtown location, which was located in Block E, closed in 2008. The company said it will continue to honor gift cards and that its rewards programs are still in effect. In addition, its Web site will remain up and running.
Borders has been struggling financially for some time, which prompted rumors from various media sources earlier this month that the company would soon file for Chapter 11.
The retailer posted a loss of $74.4 million for the quarter that ended in October. Financial information for the company's most recently completed quarter and fiscal year is not yet available.