Philosophy
It looks like Chapter 11 will be the last chapter for Borders Group after all.
The struggling retailer failed in its last-ditch effort to find a white knight buyer that could top a bid in bankruptcy court by two liquidation firms. The closings of Borders’ remaining 399 stores – including 13 in Massachusetts – will take place by the end of September, a move that will lead to the loss of nearly 10,700 jobs.
Borders, the nation’s second largest bookstore chain, conceded its defeat today by announcing that it will seek bankruptcy court approval for the sale of the company’s assets to liquidators Hilco and Boston-based Gordon Brothers.
In the final hours, Borders executives hoped the liquidation firms’ bid, valued at nearly $300 million, would be a starting point for an auction that was scheduled to begin tomorrow. But Borders said this afternoon that it was canceling the auction because it hadn’t received any other bids to continue to operate the business.
“We were all working hard towards a different outcome,” Borders President Mike Edwards said in a prepared statement. “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.”
Nearly three weeks ago, Ann Arbor, Mich.-based Borders announced plans to sell itself to a private equity firm that would keep the business going. That private equity firm, Najafi Cos., had plans to buy Borders for $215 million and to assume $220 million in debt.
But that sale fell apart last week after creditors objected because the arrangement didn’t prevent Najafi from acquiring Borders and liquidating the company. If Borders was to be liquidated, the Hilco-Gordon Brothers bid was viewed as the more valuable offer.
Borders had already closed about a third of its remaining stores after filing for Chapter 11 bankruptcy protection in February. The remaining Massachusetts stores to close include locations in Hanover, Kingston, Cambridge, Dedham, Mansfield, Downtown Crossing, Logan Airport, Marlboro, Taunton, North Attleboro, Swampscott and Swansea.
Mike Tesler, partner at the Retail Concepts consultancy in Norwell, said Borders’ complacent management failed to adapt to broad industry trends in the past decade.
Tesler said Borders executives failed to reduce the size of Borders’ stores to reflect the rising popularity of online book sales. He said they also failed to reduce their focus on CD and greeting card sales quickly enough, or to develop a popular e-reader business like rival Barnes & Noble’s Nook.
“It’s a case study in poor management,” Tesler said of Borders. “Talk about handwriting on the wall – it was paint on their freaking windshield, and they just kept driving. It’s unfortunate, because the people who work at their stores are all going to be out of jobs.”
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Philosophy
Borders bookstores to close...don't blame e-books
"Borders Group admits defeat, prepares for liquidation"
by
Jon Chesto
July 18th, 2011
The Patriot Ledger
by
Jon Chesto
July 18th, 2011
The Patriot Ledger
It looks like Chapter 11 will be the last chapter for Borders Group after all.
The struggling retailer failed in its last-ditch effort to find a white knight buyer that could top a bid in bankruptcy court by two liquidation firms. The closings of Borders’ remaining 399 stores – including 13 in Massachusetts – will take place by the end of September, a move that will lead to the loss of nearly 10,700 jobs.
Borders, the nation’s second largest bookstore chain, conceded its defeat today by announcing that it will seek bankruptcy court approval for the sale of the company’s assets to liquidators Hilco and Boston-based Gordon Brothers.
In the final hours, Borders executives hoped the liquidation firms’ bid, valued at nearly $300 million, would be a starting point for an auction that was scheduled to begin tomorrow. But Borders said this afternoon that it was canceling the auction because it hadn’t received any other bids to continue to operate the business.
“We were all working hard towards a different outcome,” Borders President Mike Edwards said in a prepared statement. “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.”
Nearly three weeks ago, Ann Arbor, Mich.-based Borders announced plans to sell itself to a private equity firm that would keep the business going. That private equity firm, Najafi Cos., had plans to buy Borders for $215 million and to assume $220 million in debt.
But that sale fell apart last week after creditors objected because the arrangement didn’t prevent Najafi from acquiring Borders and liquidating the company. If Borders was to be liquidated, the Hilco-Gordon Brothers bid was viewed as the more valuable offer.
Borders had already closed about a third of its remaining stores after filing for Chapter 11 bankruptcy protection in February. The remaining Massachusetts stores to close include locations in Hanover, Kingston, Cambridge, Dedham, Mansfield, Downtown Crossing, Logan Airport, Marlboro, Taunton, North Attleboro, Swampscott and Swansea.
Mike Tesler, partner at the Retail Concepts consultancy in Norwell, said Borders’ complacent management failed to adapt to broad industry trends in the past decade.
Tesler said Borders executives failed to reduce the size of Borders’ stores to reflect the rising popularity of online book sales. He said they also failed to reduce their focus on CD and greeting card sales quickly enough, or to develop a popular e-reader business like rival Barnes & Noble’s Nook.
“It’s a case study in poor management,” Tesler said of Borders. “Talk about handwriting on the wall – it was paint on their freaking windshield, and they just kept driving. It’s unfortunate, because the people who work at their stores are all going to be out of jobs.”
- The More Things Change...
When Borders went out of business a few months back, we thought about bookstores, record stores, and recognizable other parts of modern life that would be going away in the course of things. But last night, sitting in a field with hundreds of other families...
- 8-tracks Of The Future
The shorter of the short people wants desperately to make a call from a phone booth. He's seen them in old movies and really wants to try one, as if it is some exotic phenomenon. Payphones are simply pointless when everyone has a cellphone. I drive...
- Location, Location, Location...used Bookstores Lose In Nyc
"Literary City, Bookstore Desert" Surging Rents Force Booksellers From Manhattan by Julie Bosman March 25th, 2014 The New York Times After scouring Manhattan for a second location for her bookstore, Sarah McNally finally decided to open one in Brooklyn...
- Borders Bookstores--going Down
"Borders 'store closing' sales attract shoppers" About one-third of Borders bookstores are expected to shut by the end of April, including 21 in Southern California. by Andrea Chang February 21st, 2011 Los Angeles Times Bargain hunters were...
- Small, Independent Bookstores
In my city of nearly two million, they are virtually gone...maybe three left. Even used bookstores are nearly gone and relegated to thrift stores. "Is there hope for small bookstores in a digital age?" by Bob Minzesheimer February 9th, 2011 USA TODAY...