Borders Group, parent of the U.S. mainland’s once-dominant book retailer, is marking the final chapter of its 40-year history by seeking the U.S. Bankruptcy Court’s approval Friday to sell itself off to a liquidator, a decision that is expected to immediately trigger a going-out-of-business sale that will wrap up sometime in September.
Its demise comes after several years of dwindling sales resulting from stiff competition from discount stores and rising popularity of e-books, among other things. Before making its decision Monday, Borders Group had been in talks with a possible buyer, but the deal fell apart last week.
“We are saddened by this development,” said Borders Group president Mike Edwards. “We were all working 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.”
Upon approval of the petition, Borders will turn over the closing of some 400 stores it has left, including the last location left in Puerto Rico at Plaza las Américas, to a third-party liquidator.
“It seems that Borders will be closing all its stores, including Plaza las Américas, but so far, we have no new official information,” Lorraine Vissepó, communications director for the shopping center, told News is my Business.
The two-story, 34,100 square-foot Plaza las Américas store was Borders’ first location in Puerto Rico. The store played the role of public library, hosted scores of book signings — including many by local and international celebrities, from Gloria Estefan to Ricky Martin — and community events.
“Our bankruptcy attorneys are monitoring the situation in the court where the case is being seen and should there be a change that impacts the local store, they will inform us immediately,” Vissepó added.
Borders went on to open two more locations in Puerto Rico, in Mayagüez and Carolina, as part of an ambitious expansion plan that never took. However, those stores were included among the chain’s underperforming locations that closed several months after Borders Group’s Chapter 11 filing in February. Approximately 70 employees lost their jobs.
According to DJM Realty, the New York-based company that will oversee the liquidation and subsequent store closings, and negotiate the termination of some 259 remaining leases, the Borders location at Plaza las Américas pays more than $1 million in yearly rent. Its original lease was slated to expire in June 2014, according to DJM’s property listing posted online.
“This group of Borders’ stores has generated very strong interest from retailers. With a lack of new real estate development and restrictive barriers of entry in several key markets, surplus real estate like Borders becomes a very good opportunity for a number of growing retailers looking to open for business during the next four to 12 months,” said Andy Graiser, co-president of DJM Realty.
When everything is over, some 11,000 people will lose their jobs.