But the social network’s advertising revenue grew 18.4% during the quarter.
Borders plans to focus more on e-commerce with capital it plans to use while undergoing a financial restructuring. Oriental Trading, meanwhile, expects to continue building on a stabilized financial performance of the past 12 months, CEO Sam Taylor says.
Borders Group Inc. isn't ready to close the books on its business. Along with filing for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York last month, it plans to focus more on its retail e-commerce operations as it cuts nearly 200 stores, or 30% of its chain.
Borders, which in recent months has delayed payments to vendors, listed assets of $1.27 billion and total debts of $1.29 billion in its bankruptcy filing. Among its debts, Borders owes $41.1 million to publisher Penguin Putnam Inc., $36.8 million to Hachette Book Group, $33.7 million to Simon & Schuster Inc., $33.4 million to Random House, and $25.8 million to Macmillian/MOS
Borders generated web sales of $60.4 million for the fiscal year ended Jan. 30, 2010, and $43.3 million through the third quarter of its current fiscal year, which ended Oct. 30. The retailer lists Pershing Square Capital Management LP as owning 31.3% of the company's publicly traded interest and LaBow Gamma Limited Partnership 15.4%.
On a hopeful note, Borders has received commitments for $505 million in debtor-in-possession financing led by the Retail Finance and Restructuring Operations unit of GE Capital to restructure its business and focus the company more on e-commerce.
"This financing should enable Borders to meet its obligations going forward," says group president Mike Edwards. "It also affords Borders the opportunity to move forward in implementing the appropriate business strategy."
Web and catalog retailer Oriental Trading Co., meanwhile, has renewed its financial health after having filed for bankruptcy last August.
In December a U.S. bankruptcy court judge in Delaware approved a reorganization plan that would restructure about $500 million in debt and give most of the equity in a reorganized company to secured lenders. Upon emerging from bankruptcy last month, the company also said it would have $50 million in exit financing.
Other specifics of the reorganization plan give secondary lien holders warrants to purchase about 5% of Oriental Trading's new common stock. General unsecured creditors will receive a cash disbursement in an amount equal to their prorated share of $1.1 million, according to Oriental Trading's bankruptcy paperwork.
Oriental Trading emerged from Chapter 11 with a significantly improved capital structure and strong liquidity, having reduced its debt by nearly 70%, says CEO Sam Taylor. "Our new capital structure provides us with a sustainable, long-term financial foundation from which we will drive the future growth of the business," says Taylor. "Performance has stabilized over the last 12 months with revenue growing, continued double-digit operating margins, and record-high customer satisfaction."