Borders bookstore closing

[hawthorne]

Borders Closing. 10700 jobs at risk.

(AP) NEW YORK - There will be no storybook ending for Borders. The 40-year-old book seller could start liquidating its 399 remaining stores as early as Friday.
The Ann Arbor, Michigan-based chain, which helped pioneer the big-box bookseller concept, is seeking court approval to liquidate after it failed to receive any bids that would keep it in business. The move adds Borders to the list of retailers that have failed to adapt to changing consumers' shopping habits and survive the economic downturn, including Circuit City Stores Inc., Blockbuster and Linens 'N Things.

On Thursday, Borders is expected to ask the U.S. Bankruptcy Court of the Southern District of New York at a scheduled hearing to allow it to be sold to liquidators led by Hilco Merchant Resources and Gordon Brothers Group. If the judge approves the move, liquidation sales could start as soon as Friday; the company could go out of business by the end of September.

Borders' attempt to stay in business unraveled quickly last week, after a $215 million "white knight" bid by private-equity firm Najafi Cos. dissolved under objections from creditors and lenders. They argued the chain would be worth more if it liquidated immediately.

"We were all working hard toward a different outcome, but the headwinds we have been facing for quite some time, including the rapidly changing book industry, e-reader revolution, and turbulent economy, have brought us to where we are now," said Borders Group President Mike Edwards in a statement.

Simba Information senior trade analyst Michael Norris said a Borders liquidation could have far-reaching effects, putting thousands of people out of work at a time of high unemployment, particularly in Michigan where Borders is based. The chain, which has been shrinking in recent years, currently has 10,700 employees.

Norris predicts the closing also could cause sales of electronic books to fall. Borders, for one, entered the electronic book market with Canada's Kobo Inc. last year. Owners of the Kobo e-reader will still be able use Kobo software to buy and read books. And Kobo officials said users of Borders e-book accounts, which began transitioning to Kobo in June, will be able to access their e-books uninterrupted.

"Bookstore employees don't just sell books, they sell the activity of reading, and this decision throws thousands of them out of work," he said. "This industry is going to slowly figure out that a lot of e-book readers still use bookstores all the time to discover what's new before heading home to buy it for their e-reading device."

The loss of Borders stores will also deal a blow to U.S. shopping malls, according to real estate sources.

Borders' move to close 228 stores while it reorganized in bankruptcy protection already increased the collective vacancy rate of shopping centers that contained a Borders to 9.3 percent from 4.2 percent, estimated Chris Macke, senior real estate strategist at CoStar Group, the nation's largest provider of real estate data. Macke calculated the liquidation of the rest of the chain could increase the vacancy rate on that same basis to 18.8 percent. Borders stores average about 25,000 square feet (2,322 square meters), about half the size of a football field.

But perhaps the biggest impact of Borders going out of business will be to the consumer. Asia Lyons, 32, was at a loss Monday when she learned she would have to find somewhere new to shop for books. The New Yorker, a manager at Starbucks, buys 50 to 100 books a year for her and her daughter and usually buys them at the Borders near Penn Station.

"I like to see the book in front of me and know what I'm getting," she said. "I don't even know where another book store is around here."

It has been a long fall for Borders since Tom and Louis Borders opened their first store in 1971, selling used books in Ann Arbor. At its start, the brothers were mostly interested in offering other bookstores a system they developed for managing inventory.

But in 1973, the store moved to a larger location and shifted its focus to selling new books and expanding, helping pioneer the big-box bookstore concept along with Barnes & Noble Inc. At the time, Waldenbooks and B. Dalton mall chains, with small stores and 20,000 to 50,000 titles, were growing rapidly. The new superstores, by contrast, offered between 100,000 and 200,000 titles, as well as enticements to linger like comfortable chairs and attractive lighting.

Kmart Corp. saw the potential and acquired Borders in 1992, forming a book unit with Waldenbooks. It then spun the bookstores off as a separate company in 1995, the same year Amazon started selling books online.

Borders was slow to adapt to the changing industry and lost book, music and video sales to the Internet and other competition. Sales began to fall, leading to a revolving door of CEOs. By the time Borders' current CEO, financier Bennett LeBow, came aboard in May 2010 after investing $25 million in the company, bankruptcy was already looking like a strong possibility.

Borders filed for bankruptcy protection in February after being hurt by tough competition from online booksellers and discounters. It hoped to successfully emerge from bankruptcy protection by the fall as a smaller and more profitable company, but pressure from creditors and lenders eventually led the chain to put itself up for sale and finally, seek approval to liquidate.

At its peak, in 2003, Borders operated 1,249 Borders and Waldenbooks, but by the time it filed for bankruptcy protection in February that had fallen to 642 stores and 19,500 employees. Since then, Borders has shuttered more stores and laid off thousands.

Borders says it expects to be able to pay vendors for all expenses incurred during the bankruptcy cases.

 

[cudacuf]

I was thinking Amazon might buy Borders...for a minute.

 

[DemonH2]

I can see the Faux News headline now:

"Obama's failure to secure borders causes more job loss'

 

[WickedMofo]

More Job Losses? How about those of us that have been unemployed over two years? This economy if going even deeper into shit. Yet we can bail out Wall Street.

 

[DemonH2]

Lol read what I said closely, its a joke, though can be tough to spot!

Didn't mean to start a political debate(please Fry, don't punish me again)

 

[EverquestBB]

Too cerebral

I can see the Faux News headline now:

"Obama's failure to secure borders causes more job loss'

I thought it was funny . . . the subtleties of the double entendre are often missed by the undereducated.

 

[WickedMofo]

Lol read what I said closely, its a joke, though can be tough to spot!

Didn't mean to start a political debate(please Fry, don't punish me again)

Oh in that case. Never mind.

 

[Kkthnx]

Borders closed their UK stores a while ago.

 

[rob]

you know what is awesome? The Barnes and Noble Nook is being adertised on this thread.

 

[Sum1]

I don't have a lot of sympathy for companies who have seen the writing on the wall for years and failed to adapt to the changing market. The auto makers should have been allowed to fail, just like Borders and Barnes and Noble are going to. It sucks, but it's the result of competition in our market. There's this neat Iphone app (guessing droid too) called Red Laser ... if you don't have it you need to get it. Basically it lets you scan barcodes on any product and it goes out and searches the internet and close stores for matches, listing the prices that competitors are selling it for. I couldn't believe how much cheaper places like ebay and amazon are (and textbooks.com) compared to stores... we're talking 50% of the price, often times. That's crazy, and why should I spend a premium anymore when shipping is so cheap and relatively fast?

Welcome to the 21st century.

 

[dulak]

While I agree that shopping around on the net can be cheaper at times, having to wait on it to be shipped can get quite annoying. The "premium" price is what you pay for convience. Which, if you'll notice, is why a lot of convience store prices are higher than a normal grocery store or Wal-Mart. I can go to WM and buy a 2 TB external HD for around 120 bucks plus the cost of gas to get there or I can order it from newegg for a bit of a cheaper price. It really just boils down to how quick you really need the items you're searching for. As to Borders closing, no major loss there imo. I've been a long time customer of B&N. Doubt they'll be closing their doors anytime soon. Sucks for Borders but just means more business for their competitors. And if I sound like a moron...Well, there's no if, I probably do and make no sense.

 

[Blitzkrieg]

The one hear 86'd awhile back. It's kind of funny as that was THE place I would go to when I wanted to actually buy printed material. I suppose I just don't do it often enough.

I suppose I will have to go to the ritzy part of town to get any books.