The company has officially thrown in the towel.
Following the best efforts of all parties, we are saddened by this development, said Borders President Mike Edwards. The headwinds we have been facing for quite some time, including the rapidly changing book industry, eReader evolution, and turbulent economy, have brought us to where we are now.
Borders had been in talks with Books-A-Million late Monday to buy 50 or fewer of the chain's stores but that did not materialize. Late Monday Borders ended its bankruptcy saga that begin when the company filed Chapter 11 in February by saying the company will proceed with selling its assets to liquidation firms Hilco and Gordon Brothers.
The plan will be submitted to the U.S. Bankruptcy Court for approval. A hearing will be held on the matter Thursday.
Borders was among the pioneers of the big box book retailers, growing in the 1990s to more than 1,000 stores nationwide, but the company has lost money for five years despite shedding stores.
The company held out slim hope of finding some savior late into Monday of some sort of deal with Books-A-Million, which operates 231 stores in 23 states.
But those discussions, like others the company entertained, did not materialze. Borders has 399 stores in America and 10,700 employees. All employees will lose their jobs and all of the Borders stores will close.
Borders has more than 200 superstores in America, spread throughout the country in malls and other prime real estate locations. Borders stores average about 25,000 square feet, or half the size of a football field, so the sudden departure of 400 locations will create large empty spaces in many properties.
Borders had set a deadline for 5 p.m. Sunday for offers as the company navigates through U.S. Bankruptcy Court, trying to avoid liquidation, but no offers were obtained.
Borders had appeared in the past two week to find a purchaser, but private-equity investor Najafi Co.'s $215 million offer for Borders is no longer on the table. The company's head, Jahm Najafi, told Bloomberg through e-mail response his company would not participate in the auction. Najafi's bid faced opposition in bankruptcy court from creditors who feared his company planned only to liquidate Borders.
Najafi says he tried to remove a clause in his offer allowing him to liquidate Borders to satisfy creditors by working with large U.S. publishers to get satisfactory shipping terms for new product, but at least one would not agree, and Najafi says he hs backed off completely -- leaving Borders facing liquidation if another buyer is not found immediately.
Borders Group President Mike Edwards told the Wall Street Journal Sunday in an interview the retailer had received some inquiries over the weekend. Hopefully we'll see a positive outcome, he said.
But a deal never materialized, signaling the end for the Ann Arbor, Michigan-based company. Still, last-minute efforts were sought but nothing was worked out.
Borders had pursued a dual-track process allowing the company to seek buyers to keep the bookstore chain open, while proceeding with a sale to liquidators if that did not occur.
Borders began with a single store in 1971, and the company grew to more than 1,000 bookstores nationally before it began closing stores a few years ago.
Brick-and-mortar bookstores have struggled since the recession and the fast growth of digital books.
Late last year Barnes and Noble, America's largest bookstore chain, said it was in discussions for a possible sale and looking at other strategic options for the future since it was losing money as buyers pulled away from hardcover books, the most lucrative product brick-and-mortar stores have traditionally sold.
Borders has struggled for years. The company opted for a decade to avoid developing its own online bookstore, as did Barnes and Noble, America's largest bookstore chain, partnering for many years with Amazon instead before launching its own online bookstore in the past year. That move was viewed by many industry observers as costly to Borders' future.
Borders also never entered the market with a digital reader as did Barnes and Noble with its Nook.