Diamond Suspends Book Shipments To Borders Due To Non-Payment
According to an email obtained by ComicMix, Diamond Book Distributors has suspended further book shipments to Borders stores because Borders suspended payments to its suppliers earlier this week. Diamond handles distribution for Image, Oni, Dark Horse, Dynamite, and IDW, which distributes trade paperbacks to ComicMix.
The email (with redacted email addresses) follows:
Date: Wed, 12 Jan 2011 17:08:22 -0500
From: “Tom Sadowski”
To: “Tom Sadowski”
CC: “Bill Schanes”, “John Wurzer”, “Roger Fletcher”, “Kuo-Yu Liang”, “Joshua Hayes”
January 12, 2011
Dear Diamond Book Distributors Client,
This email is to confirm reports in the news that Borders is suspending
payments to its suppliers, inclluding [sic] Diamond. As a result, we have made
the difficult decision to stop shipping them and put their account on
hold, as of last week, until such time as they are able to resume payment.
DBD is actively seeking a resolution to this issue and will work with
Borders to get shipments moving again provided that we can craft a
solution that proves to be in the best interests of both DBD and our
If you have anyy [sic] additional questions or concerns, please feel free to
drop me an email or give me a call.
Vice President of Purchasing
Diamond Comic Distributors, Inc.
Borders has been in trouble for a while, with many of their current problems stemming from a 2005 $250 million stock buyback. The chain confirmed on December 30 that it was delaying payments to vendors while it works on restructuring its debt. On New Year’s Eve, Calvin Reid of Publishers Weekly reported that “at least one of the “big six” New York houses has suspended shipping books to Borders, a troubling sign for the company as it attempts to find lenders to refinance its debt and provide enough liquidity to get the national book retail chain through to early 2012. Borders carries about $450 million in trade payables on its balance sheet and many publishers are anxiously waiting to see which houses will be paid and which will not be.”
There are 509 Borders superstores and 168 Waldenbooks stores in the U.S., making Borders a significant segment of the retail market; ICv2 estimating that over 20% of manga sales in the bookstore channel are through Borders.
For those industry people who remember the LPC bankruptcy in 2002, back when LPC was the exclusive distributor of trade paperbacks and graphic novels into bookstores for Image, Oni, Dark Horse, Top Shelf, Tokyo Pop, Drawn and Quarterly, Highwater Books, Alternative Comics, Humanoids Publishing, CrossGen, and AiT/PlanetLar, which helped bankrupt CrossGen and nearly took out Top Shelf, this is turning into a very nervous time.
PW reports that tomorrow Borders and publisher representatives will be meeting, hoping to hear “about the retailer’s new finance and turnaround plan from the Borders’ team. Publishers were unimpressed with the presentations made by Borders last week and the sense is that if Borders expects publishers to accept their proposal for publishers to exchange missed payments for notes, they need to hear a much more robust plan.” Borders also confirmed that it will officially shut its LaVergne, Tenn. warehouse by mid-July, cutting 310 jobs. Of course, by the end of tomorrow we could be hearing about a lot more jobs being lost…