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No Storybook Ending for Borders Group

The bookstore chain's bankruptcy tale concludes with liquidation

July 28, 2011 By Danielle Cantor and Noelle Skodzinski
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It started with a "novel" beginning almost 50 years ago—when Lawrence Hoyt opened his first independently owned bookstore in Pittsburgh, Pa., calling it The Walden Book Store in tribute to Henry David Thoreau's literary classic, "Walden," and when nine years later Tom and Louis Borders opened their first 800-square-foot used bookstore in Ann Arbor, Mich. But it has, unfortunately, not had a storybook ending.

Borders Group (the result of several Walden-Borders acquisitions) began its going-out-of-business sales Friday, July 22, in all 399 of its remaining locations, as part of the company's court-approved liquidation, which is being managed by a joint venture composed of Gordon Brothers Group, LLC; Hilco Merchant Resources, LLC; Great American Group, LLC; SB Capital Group, LLC; and Tiger Capital Group, LLC, according to a Gordon Brothers Group press release.

"A spokesperson for the joint venture said, 'This is the final opportunity for consumers to take advantage of truly compelling discounts on a tremendous selection of literature, entertainment media and much more. We anticipate that today’s value-conscious consumer will respond very positively to these outstanding savings. We expect this will be a short sale,'" according to the press release.

The 399 stores include 259 Borders superstores, 114 Borders Express and Waldenbooks stores, and 26 Borders airport stores, according to Gordon Brothers Group. "Over $700 million of inventory, including books, puzzles/games, activity sets, stationery, magazines, music and movie media, calendars, posters and more will be liquidated, as well as store fixtures, furnishings and equipment," the company announced.

The liquidation sales mark the end of Borders' struggle to stay afloat since filing for bankruptcy earlier this year.

In February, Borders Group Inc. released a press release revealing that the bookstore chain had filed a petition for reorganization relief under Chapter 11 of the Bankruptcy Code.

In that press release, Borders Group President Mike Edwards stated, "It has become increasingly clear that in light of the environment of curtailed customer spending, our ongoing discussions with publishers and other vendor related parties, and the company's lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor and which are essential for it to move forward with its business strategy to reposition itself successfully for the long term. To position Borders to remedy this condition, Borders Group, with the authorization of its board of directors, has filed a petition for reorganization relief under Chapter 11 of the Bankruptcy Code. This decisive action will give Borders the opportunity to achieve a proper infusion of capital in order to have the opportunity to have the time to reorganize in order to reposition itself to be a successful business for the long term.”
 

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