The most important filing made by Borders Group Thursday involved its ongoing efforts to reduce its rent. As part of its motion asking the bankruptcy court to authorize the company to renegotiate leases, Borders said it is accelerating its pre-bankruptcy program to identify underperforming and unprofitable stores, not to necessarily close those stores but to get concessions from the landlords to keep the stores open.
Borders noted that during the two years prior to the February 16 Chapter 11 filing, it had obtained rent concessions of about $38.3 million at 154 locations. Borders said that while it is prepared to close more underperforming stores—it is closing 226 superstores, having recently added Emeryville, Calif. to the closing list--the chain “also believe[s] it is beneficial to try to obtain concessions from Landlords that can turn an underperforming store into a profitable location.”
The retailer noted that its real estate consultant, DJM Realty Services, “have renegotiated a significant number” of Borders’s leases and are continuing to have discussions with more landlords. Borders’s objective is “to continue negotiating rent concessions during these chapter 11 cases in furtherance of {its} goal of emerging from chapter 11 as a stronger and more viable company.”
