Tick Tock for Borders
Tomorrow's the deadline for Borders to repay its loan to Pershing Square Capital Management (which, of course, has been extended several times in the past). Meanwhile, there are rumors circulating around that it's securing financing to pay off the loan. What a cliffhanger, though.
Even if it is able to repay the loan, though, it's not anywhere near out of the woods over the long haul, given its debt situation, the competitive landscape, the digital disruption that's already starting to make a difference... and good grief, it just lost a CEO, too. That's not even easy on far more stable companies.
It really does astound me how long Borders has been able to limp along like this (and some of these situations really do illustrate an interesting investing lesson in how long struggling companies can actually stagger along -- a lot longer than some of us might think, apparently, although again, it really helps to have a super supportive shareholder who arguably doesn't like to admit defeat, doesn't it?). Borders really strikes me as the retailer most likely to fail that I follow (Blockbuster of course fits into the category too, but I don't really follow Blockbuster very closely). Any thoughts? I guess we'll find out what happens tomorrow.