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Bookseller Borders, which helped pioneer superstores that put countless mom-and-pop bookshops out of business, plans to close about 200 of its 642 stores over the next few weeks.
Borders Group Inc. filed for bankruptcy protection and said it would close about one-third of its bookstores, after years of shriveling sales that made it impossible to manage its crushing debt load
Originally posted by PamelaBritton2U
As an author with fifteen years in the publishing industry, this was NOT unexpected news. Borders has been suffering for years. Frankly, I'm surprised they lasted this long. On-line sales have taken a huge chunk of change from bricks-and-mortar stores. Used book sales do even more damage.
Mark my words, we'll be digital before too long. We'll be just like music. Download us once and you'll be done. That's the only way the publishing industry will survive.
If I could, I would buy every used copy of my books from Amazon.com. It kills me that people are reading MY words--my own blood, sweat and tears--and not paying me a dime. How would you like to go to work every day and not get paid?
Okay, okay...I'm done venting. Sorry to go off on a tangent.
Pamela Brittonedit on 16-2-2011 by PamelaBritton2U because: ...I'm an author that can't proof read.
Originally posted by jetflock
I usually don't care for the big chain bookstores....Everything is banged up, people spread books all over the floor....and the worst.....I used to work at one of these places when I was a kid, you would be surprised how much stuff has been in the bathroom.....
Originally posted by thisguyrighthere
None of these big ass media stores will survive.
All the little book/record shops got killed by these monster book/record stores and now mailorder is killing the big record/book stores.
Not once has one of these stores ever had the book I was looking for. Their reply to my question is always "we can order it for you." Well, I can do that. And save travel, gas, hassle, obnoxious music, pushy clerks, and all the typical things that make retail shopping such an unbearable hell.
They did it to themselves by being too big for their own good and too annoying for everybody else's own good.
Kmart and Waldenbooks: Borders was acquired in 1992 by Kmart, which had acquired mall-based book chain Waldenbooks eight years earlier in 1984......
Leveraged buyouts involve an investor, financial sponsors or private equity firms making large acquisitions without committing all the capital required for the acquisition. To do this, a financial sponsor will raise acquisition debt which is ultimately secured upon the acquisition target... en.wikipedia.org...
...In January 1982, former US Secretary of the Treasury William Simon and a group of investors acquired Gibson Greetings, a producer of greeting cards, for $80 million, of which only $1 million was rumored to have been contributed by the investors. By mid-1983, just sixteen months after the original deal, Gibson completed a $290 million IPO and Simon made approximately $66 million. The success of the Gibson Greetings investment attracted the attention of the wider media to the nascent boom in leveraged buyouts. Between 1979 and 1989, it was estimated that there were over 2,000 leveraged buyouts valued in excess of $250 billion... en.wikipedia.org...
....These days, corporations seem to exist for the investment bankers.... In fact, investment banks are replacing the publicly held industrial corporations as the largest and most powerful economic institutions in America.... THERE ARE SIGNS THAT A VICIOUS spiral has begun, as each corporate player seeks to improve its standard of living at the expense of another's. Corporate raiders transfer to themselves, and other shareholders, part of the income of employees by forcing the latter to agree to lower wages. January 29, 1989 New York Times: LEVER AGED BUYOUTS: AMERICAN PAYS THE PRICE
....Both economic and regulatory factors combined to spur the explosion in large takeovers and, in turn, large LBOs. The three regulatory factors were the Reagan administration's relatively laissez-faire policies on antitrust and securities laws, which allowed mergers the government would have challenged in earlier years; the 1982 Supreme Court decision striking down state antitakeover laws (which were resurrected with great effectiveness in the late eighties); and deregulation of many industries, which prompted restructurings and mergers. The main economic factor was the development of the original-issue high-yield debt instrument. The so-called "junk bond" innovation, pioneered by Michael Milken of Drexel Burnham, provided many hostile bidders and LBO firms with the enormous amounts of capital needed to finance multi-billion-dollar deals.... www.econlib.org...
...In the 1980s during the great takeover boom and hollowing out of the industrial heartland, many states adopted amendments to their corporate codes that codified directors' fiduciary duties, so-called "constituency statutes". In general, these provisions made it clear that a director need not "maximize shareholder value." Rather, in complying with their fiduciary obligations, directors may take all sorts of things into consideration - the impact of their decisions on various constituencies, including employees, the community, the environment, the color of the sky, whatever...
The 1980s LBO boom was a scourge for management. They used whatever tools at their disposal to prevent an acquisition... The Delaware courts stepped in... In short, the message from the courts was that boards did not have a free hand to put off all takeover attempts... [remember many firms are incorporated in delaware because of business friendly laws] lawprofessors.typepad.com...
‘Whitewashed Windows and Vacant Stores’
As I drive around my town, I can’t get the lyrics or somber melody out of my head. It is like witnessing old friends drop dead one by one....
And, it isn’t just small enterprises. We lost a Circuit City, a Chevrolet dealership, tried-and-true franchises like Dairy Queen and Arby’s. Last week Sam’s Club announced it will close its local big box bulk store. Then came news that Wal-Mart, the parent company, intends to lay off 10,000 Sam’s Club Employees. Even the ubiquitous 99 cent stores have been cut in half....
So, the businesses that provided jobs are gone, the office and retail space sits vacant, likely in default. The windows get broken, the walls get tagged, the weeds grow, trash blows, and, with no one to stop it, nature begins the process of permanent destruction. The value of those businesses and real estate is now gone.
Once Wall Street realized that success can only be so profitable but failure has unlimited potential, the race was on to loan money and securitize the debt.
Just like sub-prime residential mortgages, commercial real estate financing and corporate raiding offer opportunities on many fronts. Private-equity groups bought up large retailers and buried them in debt. Leveraged buyouts, as their name implies, are exactly that, leveraged, in that most if not all of the purchase price is borrowed money. The buyer has little, if any, skin in the game.
You might be familiar with the mall-based, teen-focused, accessories chain, Claire’s Stores. It was taken over in 2007 by Apollo Management LP for $3.1 billion. At the time, the chain had over $245 million in cash on hand. Today, the cash is gone. Struggling under the weight of $2.3 billion in debt, sales continue to decline.
Underlying all of this are the same activities that led to losses in sub-prime residential equities. Money was looking for a home, and some investors saw that cash could be leveraged out of these enterprises by buying them with someone else’s money and looting the assets....
Originally posted by ldyserenity
Amazon is the Antichrist!edit on 16-2-2011 by ldyserenity because: to add