Borders could close a further 75 branches in addition to the 200 it is attempting to liquidate, as it revealed it was losing around $2m per week.
The retailer filed for Chapter 11 bankruptcy yesterday [16th February] and was granted $400m in emergency financing from lenders led by GE Capital, according to Bloomberg.
A new hearing by US bankruptcy judge Arthur Gonzalez today [17th February] will rule on a request to close 200 stores amid competing bids on the right to liquidate stock and fittings. According to company lawyer David Friedman, one creditor has bid $30m more than an initial stalking horse bid.
Borders has a deal in place with several liquidators to guarantee almost three quarters of the cost value of all merchandise. In court papers, the retailer estimated that this will bring in up to $150m to repay its creditors.
In the fiscal year ended January 29th, net sales at Borders slumped 17.9%, to $2.3m. The net loss for the first 11 months of the fiscal year was $168.2m, compared to a 2010 full year net loss of $109.4m.
Penguin is the largest unsecured creditor with a $41m claim. Hachette Book Group has a claim of $36.9m and Simon & Schuster Inc. has a claim of $33.8m. Random House has a claim of $33.5m.