Borders bankruptcy impacts publishers, real estate

Posted by puguh on Thursday, February 17, 2011

Borders bankruptcy impacts publishers, real estate. The five retail spaces that will be available when Borders closes a handful of metro Atlanta stores as part of its Wednesday bankruptcy filing should fill quickly, experts said. But the bookseller's decision to restructure may have a larger impact on area publishers that distribute through the chain.

The real estate that is being vacated -- Borders is closing 200 of its stores nationwide, roughly 30 percent of its locations -- is desirable property and will be appealing to retailers looking to enter or expand in Atlanta said Ruth Coan, a partner with The Shopping Center Group who leased the Michigan company a number of its spaces.

Coan said the locations' visibility, parking and easy access make them prime spaces for other retailers. The stores the company is closing are:

* 3101 Cobb Parkway in Atlanta.

* 1605 East-West Connector Road in Austell.

* 1705 Mall of Georgia Blvd. in Buford.

* 605 Ernest W. Barrett Parkway in Kennesaw.

* 3630 Peachtree Parkway in Johns Creek.

Borders has already closed two other stores in the area, and Lee Brody, vice president and regional leasing director for Weingarten Realty, said he has a lease signed to bring Party City to part of a Dunwoody store vacated last month. The Brookwood Place Borders closed earlier in February.

Both he and Coan said while the availability of seven big-box spaces in a short time is less than ideal, swapping tenants can give opportunities to other retailers during a time when little building is being done.

While Coan and Brody were confident about the future of the retail space, local publishers expressed less optimism about the impact of the bankruptcy filing. Margaret Quinlin, president and publisher of Peachtree Publishers, said she thinks the chain owes her about $30,000. As an unsecured creditor, she doesn't expect to see the money.

Quinlin said Borders makes up about 3.5 percent of the company’s sales. Over the years, Peachtree has shifted toward the library and school markets as the retail market became more volatile. During that time, Borders has also behaved increasingly erratically, she said.

"We've been somewhat judicious about dealing with them, at least for the last five months," she said. "Within the industry, you could see some of the issues with Borders."

Quinlin said Peachtree stopped selling its titles -- like New York Times bestseller "14 Cows for America" -- to Borders at the beginning of the year. But Steve Floyd, president of the publisher August House, said he hasn't sold books to Borders for 18 months.

August House's insurance carrier stopped insuring shipments to Borders. That's why the publisher of books like "Stone Soup" and "The Uglified Ducky" would not be found in the chain, he said.

Floyd said he is certain he missed out on sales, but he would rather lose the revenue than risk losing payments, like Quinlin will.

"The big question is, ‘Can they come back?'" Quinlin said. "There's a little bit of cynicism about it and a lot of prayer."


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