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U.S. markets recover from steep losses
ANN ARBOR, Mich., May 20 (UPI) -- U.S. retailer Borders Group Inc. said it asked a bankruptcy court for permission to break away from a licensing agreement with Seattle's Best Coffee LLC.
Seattle's Best, a unit of Starbucks Corp., had licensing rights for 225 Borders' bookstores that closed when the retailer filed for bankruptcy in February, The Detroit News reported Friday.
Borders now wants to operate its own coffee shops in hopes it will generate more income.
"This change will allow Borders to operate its own cafe program, enabling us to reduce the licensing fees we pay, generate significant cost savings and boost cafe profitability," Mary Davis, a spokeswoman for the retailer, said in an e-mail.
"The change will also provide us with the opportunity to tailor menu items and the cafe experience based on our customers' preferences," she said.
Currently, Borders owes Seattle's Best about $5 million, the News said.
Retail consultant Ken Dalto said the move would reduce costs for the store, but "may be a little too small and a little too late" to have a big impact on Borders' chances for survival.
In the year ending Jan. 29, Borders lost $479.9 million, a financial report says.
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