Borders filed its long-expected bankruptcy yesterday. Hundreds of its stores will be closing in the next few weeks. Besides Borders employees, two other groups are worried: book publishers, and mall owners.
For publishers, the problem is obvious: they need somewhere to sell their books. If Borders disappears, that leaves Barnes & Noble as the last big national book store with enough shelf space to move physical books in large quantities. (And B&N should come out of this whole thing just fine!) Book publishers are seriously having an existential crisis over this! It's all about e-books now! Kindles! Ipads! What to do? What to doooo?
There's also the matter of the hundreds of millions of dollars that Borders owes to publishers, only a fraction of which will be repaid.
The 4.9 million square feet of store closings will be especially painful for smaller shopping centers anchored by Borders's superstores. Their average vacancy rate will more than double to 9.5% from 4.2%, according to commercial real estate researcher CoStar Group. That's higher than the national average of 7.2%, the firm said.
There are shopping centers "anchored" by Borders? There's the first problem. Hope you're proud of yourselves, aisle-reading non-purchasers.