There will be no storybook ending for Borders. The 40-year-old bookseller could start shuttering its 399 remaining stores as early as Friday.
San Diego stores that could close this week at their two locations in Mission Valley and Plaza Bonita in National City.
The Ann Arbor, Mich.-based chain, which helped pioneer the big-box bookseller concept, is seeking court approval to sell off its assets 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.
San Diego State Marketing professor Miro Copic says Borders was slow to react to a changing economy.
"Amazon is the big Goliath coming out of the first big dot.com bubble and Borders didn't anticipate that," Copic said. "They didn't think that consumers would buy books online."
Jean Earl stood outside the Borders in Mission Valley browsing through bargain books.
"It makes me sad," Earl said. "I like the hands-on feel of books."
Keith Walter agreed.
"You know as much as we do online, there's nothing that replaces a place like this," Walter said.
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.
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. The chain, which has been shrinking in recent years, currently has 10,700 employees.
The loss of Borders stores will deal a blow to malls nationwide, according to real estate sources. Borders stores average about 25,000 square feet ---- about half the size of a football field ---- and a liquidation could leave large empty spaces across the country.
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.
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.
Borders says it expects to be able to pay vendors for all expenses incurred during the bankruptcy cases.
Copyright NBC San Diego / Associated Press
