One of the worlds most famous independent bookstores, Tattered Cover of Denver, Colorado, which has seven shops, has filed for Chapter 11 bankruptcy protection. Three shops will close before the end of the year.
Tatttered Cover CEO Brad Dempsey, a Denver bankruptcy attorney, told the Denver Post. This structure of seven stores is not sustainable. Its very difficult to be profitable without a substantial amount of additional capital that investors were not willing to provide right now.
Once approved by the court, the Chapter 11 filing will give the company access to $1 million in special financing from some existing investors and board members.
Dempsey added: Our objective is to put Tattered Cover on a smaller, more modern and financially sustainable platform that will ensure our ability to serve Colorado readers for many more decades.
Restructuring for long-term viability requires managers to make very difficult business decisions that affect people and business partners, and we intend to do what we can to minimize these impacts. Were thankful for the professionalism and dedication of our management and staff in helping Tattered Cover transition to its next successful era.
At least 27 staff positions out of Tattered Covers current 103 positions will be impacted by the closures. Some impacted employees may fill temporary seasonal positions at the remaining stores during the holiday season. The company is working to develop severance packages for eligible employees affected by the closures.
The store describes itself as a transformative independent bookstore that staunchly defends free speech, facilitates conversation and influences positive change.