Borders to Liquidate18 Jul, 2011 By: Chris Tribbey
With no bidders coming forward, Borders Group Inc. announced July 18 that it would sell its assets to a group led by Hilco Merchant Resources and Gordon Brothers Group, who will then liquidate the 40-year-old bookstore chain.
“Following the best efforts of all parties, we are saddened by this development,” said Borders Group president Mike Edwards. “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.”
Borders expects to submit the proposal in court July 21 and begin shuttering its remaining 399 stores starting July 22, with a phased shutdown of all stores by September. The stores remaining 10,700 employees will lose their jobs.
“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," Edwards said. “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. I extend a heartfelt thanks to all of our dedicated employees and our loyal customers.”
Borders filed for bankruptcy in February and had hoped a bidder would come forward by the July 17 court deadline. But despite reports that Books-A-Million was in talks to buy the chain, a bid never materialized.
The one bid Borders did receive — from Direct Brands’ parent company Najafi Cos., operators of Columbia House — was rejected by Borders’ creditors, on the fear the $215.1 million plus $220 million of liabilities bid was not high enough and that Najafi would liquidate the chain anyway.
DJM Realty said it would handle real estate duties for the remaining 259 Borders stores currently under lease.
“This group of Borders stores has generated very strong interest from retailers,” said Andy Graiser, co-president of DJM Realty. “With a lack of new real estate development and restrictive barriers of entry in several key markets, surplus real estate like Borders becomes a very good opportunity for a number of growing retailers looking to open for business during the next four to 12 months.”
California has the most Borders and Waldenbooks leases remaining, with 31.