Borders Group Inc, the second-largest U.S. bookstore chain, said it has canceled an upcoming bankruptcy auction and will close its doors for good.
The company said in a statement Monday it was unable to find a buyer willing to keep the company in operation and will sell itself to a group of liquidators led by Hilco Merchant Resources.
Borders' roughly 400 remaining stores will close, and nearly 11,000 jobs will be lost, according to the company.
We are saddened by this development, Borders President Mike Edwards said in the statement. We were all working hard toward a different outcome, but the headwinds we have been facing for quite some time.
Borders was unable to overcome competition from larger rival Barnes & Noble Inc and from Amazon.com Inc, which began to dominate book retail when the industry shifted largely online. Borders, which declared bankruptcy in February, also never caught up to its rivals' e-reader sales, namely Amazon's Kindle and Barnes & Noble's Nook.
Borders had hoped to sell itself to buyout firm Najafi Cos, which owns the Book-of-the-Month Club. While Najafi was willing to pay $435 million for the assets, the deal fell apart last week after creditors objected to terms that would have allowed Najafi to liquidate after completing the sale.
Earlier Monday, Reuters reported that Books-A-Million Inc, the nation's third-largest bookstore chain, was in talks to acquire a small number of Borders stores, citing sources close to Borders' bankruptcy. Representatives for Borders did not address the report when contacted by Reuters, and the company's statement did not say whether formal talks had taken place.
The Hilco group will begin liquidations as early as Friday, with the process to conclude sometime in September, Borders said. The bookseller will seek bankruptcy court approval of the closing procedures at a hearing Thursday in U.S. bankruptcy court in Manhattan.
Andrew Glenn, an attorney for Borders, told Reuters last week the company expected a liquidation sale to bring in between $250 million and $284 million.
(Editing by Bernard Orr and Steve Orlofsky)