Borders may shut 75 more stores

Borders Group Inc. is working quickly to form a restructuring plan and might close up to 75 more stores, depending on how talks with landlords go, Borders CEO Mike Edwards told a conference call of suppliers Friday.

The Ann Arbor-based bookseller hopes to schedule a review of its reorganization plan in early April, Edwards said. "We are moving more quickly and decisively on our restructuring plan."

Borders decided to close 200 of its 485 superstores when it filed for bankruptcy — including four in Metro Detroit. Edwards said the company has no plans for a major closing program for its remaining 148 smaller and airport stores because of prior landlord concessions. But he indicated the company is talking with landlords of superstores about renegotiating terms to improve their performance and keep them open.

"One hundred forty stores (out of 285) have been identified as on-the-bubble stores, which up to an additional 75 could be put in liquidation," Edwards said. "The decision will be made early next week."

Among those landlords is Agree Realty Corp., a Farmington Hills company that has 14 Borders stores on its properties — five of which are already scheduled to close. The Borders CEO acknowledged more closings will hurt communities.

"It is always a difficult decision to close stores, but it is a necessary part of positioning ourselves for a more profitable future given the major changes that are happening in our industry," Edwards said.

Borders held the call in a bid to reassure publishers and other vendors with whom it stopped payments in December and January prior to filing for Chapter 11 bankruptcy protection. The bookseller is still seeking concessions from publishers, who balked at renegotiating missed payments into loans for the struggling bookseller prior to its Feb. 16 bankruptcy filing.

Edwards said he hopes to restore relations with the 37 percent of the vendors who aren't shipping product at this time. About 63 percent of its major suppliers from 2010 are shipping products, he said.

Borders seeks to restore its business through cost cutting and reworking its business plan, Edwards saidThe company's restructuring plan will include a bigger emphasis on its electronic book sales — an area it ramped up prior to its bankruptcy filing; a revision of its store format; and a "refreshed" merchandising strategy, Edwards said.

But one analyst wasn't impressed.

"It's not a good situation" for Borders, the publishers and the stores, said Al Greco, a marketing professor at Fordham University's Schools of Business. "We still haven't seen a good strategic plan" for turning around the bookseller.