Bankruptcy judge says OK to huge Borders sale
Bankruptcy liquidation will start Friday with $700 million in books, DVDs, and furniture discounted up to 40 percent. Borders expects to wrap up the bankruptcy sales in September.
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Books, DVDs and furniture valued at more than $700 million will be discounted up to 40 percent starting Friday, liquidators said. The sales are expected to wrap up in September.
As many as 10,700 chain employees nationwide will lose their jobs after liquidation. Still up in the air is a possible sale of up to 35 locations to an Alabama company.
"This marks the end of an era, and we thank our customers for their patronage over our 40-year history. I encourage our customers to take advantage of this one-time opportunity to find exceptional discounts on their favorite books and other great merchandise," Mike Edwards, president of Ann Arbor, Mich.-based Borders Group, said in a statement.
The liquidation plan was approved by a U.S. bankruptcy judge in New York on Thursday — as the bookseller inked its final chapter, finally defeated by poor management decisions, massive debt and a changing industry.
Until recently, the company looked as if it might stay in business. But last week, its unsecured creditors rejected a $215.1 million buyout bid from Najafi Cos. in Phoenix.
With Borders closing shop, more Americans will turn to online competitors for books and music — accelerating a trend that hurt Borders, said Al Greco, a book publishing expert and professor of marketing at Fordham University's Graduate School of Business.
New York-based DJM Realty is handling the liquidation of the Borders leases.
Alabama-based Books-a-Million Inc. put forth an offer Thursday to buy up to 35 stores, but few details of the bid were available. Neither Borders attorneys nor Books-a-Million officials could be reached for comment.
Beginning as a used-bookstore in 1971 in Ann Arbor — home to the University of Michigan — Borders helped pioneer the book superstore and thrived in the 1980s and 1990s with greater selections, cheaper prices and more leisure space than smaller, independent book shops.
But the company fumbled through the digital age, missing important shifts in the industry as consumers migrated online and toward digital books. Poor decisions by a series of executives unfamiliar with the publishing world severely hurt Borders, Greco said.
In 2001, it turned its online sales over to Amazon.com Inc., giving the competitor access to valuable customer data. Borders didn't launch its own online sales operation until 2008. And it partnered with a Canadian firm to distribute an e-reader and launch an e-book store only last year — about three years after Amazon introduced its Kindle.
That was too late to stem falling sales. In February, Borders filed for bankruptcy.
Other bookstores might see a slight uptick in traffic from former Borders shoppers, but the chain's closing isn't good for anyone, Greco said.
Customers will have fewer places to shop. And publishers, who are likely to lose millions owed to them, have lost 399 outlets for promotions and their books, he said.
"This is a story where nobody is a winner," Greco said.