Back in February we reported on the fact that the national bookstore chain Borders had filed for a Chapter 11 bankruptcy in the hopes of being able to reorganize debts. However, after the deadline for a sale bid came and went, the bookseller has decided to call it quits and earlier this week announced plans to liquidate.
Before this business liquidation announcement, several stores in Florida and across the country had already closed. And while Borders still has close to 400 stores and more than 10,000 employees, the remaining stores will start to close for good starting on July 22.
According to a bankruptcy law professor, at one point before the liquidation announcement, selling did like look a viable option for Borders. However after a failed bid by Najafi, which owns Columbia House and Doubleday Book Clubs, the company ended up accepting defeat and decided to just liquidate. Now there will be no reorganization, instead the company will just sell off assets to pay back creditors.
In general, when looking at what happened to close down the bookseller, several factors contributed to the company’s overall financial struggles, including the downed economy and a change in the book industry.
It used to be that a person would walk into a bookstore and buy the latest read, however, with more people buying online or getting a book through an e-reader, readers are now buying and reading with just the click of a button, and the brick-and-mortar bookstores are finding themselves struggling to stay in business.
Source: Sun-Sentinel, “Borders to liquidate after sale efforts collapse,” Greta Guest, 18 July 2011