Borders Group Inc. said it would liquidate after the second-largest U.S. bookstore chain failed to receive any offers to save it.
Borders, which employs about 10,700 people, scrapped a bankruptcy-court auction scheduled for Tuesday amid the dearth of bids. It said it would ask a judge Thursday to approve a sale to liquidators led by Hilco Merchant Resources and Gordon Brothers Group.
The company said liquidation of its remaining 399 stores could start as soon as Friday, and it is expected to go out of business for good by the end of September.
Borders filed for bankruptcy-court protection in February. It has since continued to bleed cash and has had trouble persuading publishers to ship merchandise to it on normal terms that allowed the chain to pay bills later, instead of right away.
Boarders said it is following the best efforts of all parties, that they are saddened by this development. They also stated they were all working hard toward a different outcome, but the head winds they have been facing for quite some time, including the rapidly changing book industry, [electronic reader] revolution and turbulent economy, have brought them to where they are now.
Borders's best chance for survival fell apart last week when talks with private-equity investor to buy the company collapsed. Borders scrambled unsuccessfully over the weekend to find other potential buyers who would keep the chain alive.
The chain's demise could speed the decline in sales of hardcover and paperback books as consumers increasingly turn to downloading electronic books or having physical books mailed to their doorsteps.
The loss of Borders may also make it more difficult for new writers to be discovered. The liquidation of Borders is an irreplaceable loss of a big part of the book-discovery ecosystem. Thousands of people whose job consisted of talking up and selling books will eventually being doing something else, and that's bad for authors, agents, and everyone associated with the value chain in books.
Other booksellers, including Barnes & Noble Inc. and Amazon.com Inc., will go after the shoppers who formerly considered themselves Borders customers. They won't be able to pick up everyone. If shopping at your local Borders is part of your weekly routine, and then Borders is gone, you may end up doing something other than buying books.
