Ann Arbor, Mich. - Borders Group has filed for Chapter 11 bankruptcy protection, citing "curtailed customer spending" and a lack of liquidity.
The bookseller, under pressure from larger rivals Barnes & Noble and Amazon.com, said it will close 30 percent of its more than 650 stores within the next several weeks and has secured $505 million in debtor-in-possession financing led by GE Capital to continue operations.
The chain, which also carries DVDs, Blu-ray Discs and e-readers by Sony, Kobo and Velocity Micro, had liabilities and assets of $1.3 billion each as of Dec. 25, according to today's filing with the U.S. Bankruptcy Court in Manhattan.
"Borders Group does not have the capital resources it needs to be a viable competitor," president Mike Edwards said in a statement.
The company said it is serving customers "in the normal course," including honoring its Borders Rewards program, gift cards and other customer programs, and expects to make employee payroll and continue its benefits programs for its employees.
The chain emphasized that the store closings were "a reflection of economic conditions, cost structures and viability of locations, among other factors, and not on the dedication and productivity of the workforce in these stores."
"We are confident that, with the protection afforded under Chapter 11 and with the support of employees, publishers, suppliers and creditors, and the reading public, a successful reorganization can be achieved enabling Borders to emerge from the process as a stronger and more vibrant book seller," Edwards said.