Tuesday, July 19, 2011
BORDERS: THE END
The book retailer will wind down its remaining 399 stores starting July 22 after it couldn't reach an agreement with an earlier bidder, Najafi Cos., about an offer to keep the company running. Borders won't hold an auction, as there have been no proposals to keep the company operating, it said in a statement Monday.
"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 in a statement.
Liquidators led by Hilco Merchant Resources and Gordon Brothers Retail Partners, who were the opening bidders for the planned auction, will now buy the chain's assets and liquidate them, subject to bankruptcy court approval. The deadline for bids passed Sunday without any offers.
Borders has 10,700 employees, and a phased rollout will close its stores by September. The company said it will complete the wind-down under Chapter 11 bankruptcy protection and expects to be able to pay its business partners.
The sale to liquidators, still subject to bankruptcy court approval, leaves no one to assume the company's business contracts, creditors said in objections filed in bankruptcy court Monday.
The chain, which once operated more than 1,000 stores, lost business as customers switched to e-readers such as Amazon's Kindle. Barnes & Noble invested in its own Nook e-reader.