US book chain, Borders to liquidate, close remaining 399 stores
19 Jul 2011
Borders, the second-largest bookstore chain in the US, yesterday announced that it would liquidate itself after failing to find a buyer for itself.
The 40 year-old chain, which once had more than 600 stores in the US, will ask a bankruptcy court judge to approve a sale of its remaining 399 nationwide stores to liquidators led by Hilco Merchant Resources and Gordon Brothers Group.
Borders said that in the absence of a bid there was no need for an auction prior to presenting the proposal to the Court on 21 July 2011. If the judge approves the plea, liquidation sales could start as soon as Friday, and Borders could go out of business by the end of September.
Borders, which owed $36.9 million to creditors, had closed 228 stores and filed for bankruptcy-court protection in February 2011.
Founded in 1971 from a used bookstore in Ann Arbor, Michigan, Borders buckled under a tough retail environment, poor management foresight in moving to digital books and investors who had no knowledge of how a bookstore chain is supposed to run.
Its latest attempt to stay in business faded away last week after its creditors and lenders objected to the $215 million "white knight" bid from Phoenix-based private-equity firm Najafi Cos on the ground that the book chain would gain but not its creditors and the company would be worth more if it is liquidated. Borders' frantic attempt to find other potential buyers faded over the weekend.
"We were all working hard towards a different outcome, but the headwinds we have been facing for quite some time, including the rapidly changing book industry, eReader revolution, and turbulent economy, have brought us to where we are now," said Borders Group president Mike Edwards.
"For decades, Borders stores have been destinations within our communities, places where people have sought knowledge, entertainment, and enlightenment and connected with others who share their passion. Everyone at Borders has helped millions of people discover new books, music, and movies, and we all take pride in the role Borders has played in our customers' lives," said Edwards continued, "I extend a heartfelt thanks to all of our dedicated employees and our loyal customers," he added.
The Wall Street Journal said the loss of Borders may also make it more difficult for new writers to be discovered. "The liquidation of Borders is an irreplaceable loss of a big part of the book-discovery ecosystem," WSJ said quoting Michael Norris, a senior analyst at Simba Information, a unit of MarketResearch.com "Thousands of people whose job consisted of talking up and selling books will eventually being doing something else, and that's bad for authors, agents, and everyone associated with the value chain in books."
With the fading away of Borders, Barnes & Noble will be only the only remaining bookstore chain in the US.
