Debit Organize

It’s not often that two industries so overburdened with debt and cash flow issues collide. Borders, a leading international bookseller, has announced that it will be delaying payments to its publishers – a decision that’s resulted in discussion of the large chain going bankrupt. Although Borders has yet to announce any formal financial results, the social web is alight with talk of its financial situation.

The company’s executive team is due to meet in New York City shortly to discuss a move towards profitability, long-term financial plans, and other looming issues. In the meantime, however, stores have continued to operate as usual. Despite its dwindling profits and overall poor sales results, the chain – and its large influence over publishers – has continued to step forward into the new year.

However, a single slip-up could spell the end of the company. Borders is one of the world’s largest offline booksellers, responsible for a sizeable portion of many publishers’ revenue. If the company was to file for business bankruptcy, millions of dollars in unpaid bills could cause a severe income shortage for publishers – themselves companies that, at this point in time, aren’t all that secure.

It’s certainly an indicator of change in the industry, change that many believe is destined to provide better access to media for consumers in the future. Borders has been affected by the growth of both standard online retail book sales and new devices such as the Kindle and iPad, which effectively cut into the chain’s revenue stream by providing a cheaper, easier way for consumers to buy books.

For the publishing and retail book sales industry, the next few years are likely to be some of the most important on record. The rise of eBooks may be met with a subsequent dip in offline book sales – one that’s simply too much for companies like Borders to bear.