Borders Books, the nation’s second-largest book seller, starts closing stores by Friday. Borders is closing its 399 remaining stores and 11,000 employees are being laid off, reports Paid Content.
The store chain is expected to cease operations and go out of business in September 2011. In a statement, Borders Group, President Mike Edwards said, “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, e-reader revolution, and turbulent economy, have brought us to where we are now.”
Yesterday’s deadline for new bids on Borders came and went, with Phoenix-based venture capital firm Najafi “reluctantly” declining to submit a new bid and liquidation firms Hilco and Gordon Brothers the only bidders left at the table. It appears that discussions with Birmingham, Alabama-based bookstore chain Books-A-Million and other interested parties about last-minute arrangements just didn’t pan out.
Borders’ liquidation is a major development for the book industry. The company still had a 10.7 percent market share in the book store industry, according to a report by research firm IBISWorld. The company’s chief bricks-and-mortar competitor, Barnes & Noble, had 36 percent market share.
The recent emergence of e-books — which surged in 2010, powered by Amazon’s Kindle, Apple’s iPad and Barnes & Noble’s Nook — added another layer to Borders’ digital troubles. Amazon launched its store and Kindle reader in late 2007.
Borders was an early investor and minority stakeholder in the Kobo e-Reader and their ebook store, which will live on.
In June Kobo and Borders began transitioning Borders’ customers’ eBook accounts to Kobo to provide direct access to the most up to date eReading functionality, apps, and devices.
Kobo owners will continue to use their eReader devices as usual and browse and shop for new titles in the Kobo Store with no interruption in service.
Borders filed for bankruptcy in February and employed approximately 19,500 throughout the U.S., primarily in its Borders and Waldenbooks stores.
Borders said in a filing (pdf) yesterday that it had received a bid to acquire leases for 30 stores and has already closed about 200 stores.
The original Borders bookstore was located in Ann Arbor, Michigan, where it was founded in 1971 by brothers Tom and Louis Borders during their undergraduate and graduate years at the University of Michigan. About 450 of Borders’ 10,700 employees work in Ann Arbor, where the company is based, according to AnnArbor.com.
“Bookstores still comprised the largest source of book purchases, but that is sure to change in 2011 as the number of bricks-and-mortar stores declines and spending through such outlets as Amazon and BN.com increases,” said Jim Milliot, editor at Publishers Weekly. “It is quite possible that we’ll see a decline in the number of large bookselling enterprises by the end of 2011, a development that will hasten the shift to more online book buying.”
