Borders facing more hurdles

Disclosure: I own put options on Borders Group

Last May I briefly spoke about avoiding Borders Group (BGP) due to competitive pressures form Amazon and Barnes and Nobles in addition to their weak liquidity position when balanced against their debts. Things just got more challenging as Walmart just decided to lower some of their popular hardcover books to $10. Amazon followed suit for which Walmart responded with a cut down to $9. I'd love to be at either of the corporate offices today to listen to what was being discussed. This spells trouble for Borders which is starting to look more like a has been in the book business.

Crain's reported a few days ago that one of Border's flagship stores in downtown Chicago renewed it's lease for one more year. A follow up analysis by Kenneth Leonard points to a simple but valid analysis of Border's prospects. If they can't figure out this location, the outlook is pretty dire.