Borders, a fixture in Ann Arbor since opening its first store there in 1971, is planning to move its headquarters out of its current building there to find cheaper space somewhere in southeast Michigan.
Spokeswoman Mary Davis says the company hopes to cut costs with the move. No decisions have been made yet on a new location.
Borders headquarters staff occupies a free-standing building at 100 Phoenix Drive in an office park near State Street and I-94. About 500 Borders employees work at that location, she said.
The bookseller is trying to reorganize its business in Chapter 11 bankruptcy. Borders filed for bankruptcy protection in February, the victim of increasing competition from online retailers, discounters and e-books.
“We continue our focus on reducing expenses and running our business as efficiently as possible,” Davis said today.
The bookseller’s plans have not yet been conveyed to the city, Ann Arbor Mayor John Hieftje said today.
“I can’t say that I’m surprised,” he said. “Obviously, the company’s been going through a lot of turmoil. It’s something I can’t say we’ve anticipated, but certainly taken into account.”
The company at one time employed 1,000 people at its headquarters south of downtown Ann Arbor.
“I really feel for the people who work at Borders, at the headquarters and out at the stores,” the mayor said. “Those are the folks we need to be thinking about. If this is a determination of the bankruptcy settlement, as part of a move to reduce costs, there won’t be much anybody can do.”
Borders filed Chapter 11 bankruptcy to reorganize its U.S. operations on Feb. 16 in U.S. Bankruptcy Court in New York. GE Capital agreed to $505 million in financing for Borders to pay vendors, publishers and other suppliers and to keep operating day-to-day. The company plans to close 226 stores as part of the reorganization, including locations in Utica, Dearborn and Grosse Pointe.
The company is expected to lay out its plan today to emerge from bankruptcy by early September, smaller and ready to compete with Barnes & Noble, Amazon.com, Wal-Mart and others.
The Ann Arbor-based bookseller in March received approval from the courts to have more time to determine which leases to accept or reject, setting a deadline of Sept. 14. The company said that the retailer has 633 store leases to renegotiate with landlords.