Circuit City, once a well-known retail fixture, is no more. If it can't survive this holiday season's impending price war, bookseller Borders (NYSE:BGP) could be next.

Wal-Mart Stores (NYSE:WMT), Target (NYSE:TGT), and (NASDAQ:AMZN) are all playing the "how low can you go" game to lure shoppers seeking hardcover best-sellers. That can't be good for bookstore rivals Borders and Barnes & Noble (NYSE:BKS). The bricks-and-mortar book behemoths already face many disruptive influences, including the rising popularity of e-books. Handing penny-pinching shoppers great deals on hot books while they're bargain-shopping at their local discounter, or browsing from home, doesn't exactly help.

Even beyond that dire outlook, Borders must confront serious financial challenges. Check out how its key metrics stack up against those of some of its book-selling rivals:

Company Name

TTM Revenue Growth/(Loss)

TTM Profit/(Loss)

Debt/Equity Ratio

Quick Ratio






Barnes & Noble















All data from Capital IQ, a unit of Standard & Poor's. TTM = trailing 12 months.

Borders clearly still shows a nauseating loss, with revenue dropping at a daunting pace. Although Barnes & Noble also seems risky at present, at least it's still profitable, despite its own decreasing sales.

Borders' formidable debt load has been a major risk for a long time. The ruthless price wars this holiday season portends could make paying down that debt even more difficult. A quick ratio below 1.0 can be a red flag, particularly if a company's sales and profit margins are suffering mightily, and especially if it may have to deeply discount prices to clear out its inventories. For a very strong retailer like Wal-Mart, with a laser-focused supply chain, a low quick ratio is no problem. For Borders, it could be serious trouble. And if its major shareholder, Pershing Capital Management, withdraws its ongoing support, Borders' life could get even rougher.

In October 2008, I outlined three retailers I thought we might have to kiss goodbye. One was Circuit City. Borders and Talbots (NYSE:TLB) also made the list. Both have survived thus far, but both also have major shareholders who helped keep them alive, despite drastic difficulties in their businesses.

With unemployment at a multidecade high, and even employed consumers likely wanting to save money or pay down debt, this holiday season could be difficult for retailers.

On a more positive note, the chart data above might make you a bit jealous of Amazon shareholders. At a staggering 76 times earnings, the stock is admittedly pricey, even for the tech sector; fellow heavyweight Apple (NASDAQ:AAPL) commands a mere 32 times earnings. But the metrics above show that Amazon's in terrific shape in many ways, which represents security for long-term shareholders. However its stock price fares in the near term, Amazon isn't in danger of going away anytime soon. Too bad Borders can't say the same.