Today Borders Group announced it was filing for chapter 11 bankruptcy protection. Borders president, Mike Edwards said the current environment of curtailed customer spending, the lack of competitive capital resources, and other business negotiations has caused the group to go under.
As electronic promotional items like e-readers, MP3 players, and other media gadgets become the preferred medium, companies like Borders are struggling.
However, in an article by Barron’s columnist Tiernan Ray, Ray wrote mega bookseller Barnes & Noble is expected to have a positive EBITDA (earnings before interest, taxes, deductions, and amortization) of $104 million in 2013.
One of the reasons why companies such as Barnes and Noble, have been able to stay competitive is by creating and selling their own electronic promotional items. Ray adds, Barnes and Noble is expected to sell 2.35 million Nook units this year.
Without the resources to produce promotional electronic items, or a competitive online database of their own, Borders’ profits have continued to decline. In the coming weeks, Borders will close about 30 percent of its stores.
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