UPDATED: With No Options Left, Borders To Close All Stores
The liquidation will be complete by September, with some locations closing as early as Friday.
Borders Group, Inc.
, one of the largest retail book stores and newsstand providers in the United States, announced late Monday that it has been left with no other option but to close its remaining 400 stores and dismantle the company through liquidation.
John Harrington, principal of Harrington Associates and publisher of the New Single Copy
newsletter, says book stores were 11 percent of total newsstand sales last year, averaging a little more than $485.1 million in magazine sales—with Borders, Barnes and Noble
being the top three or 90 percent of bookstore sales.
“For the most part, magazine sales [now] have nowhere to go, except where Barnes and Noble or Books-A-Million expand into markets where they don’t already compete,” says Harrington. “The whole bookstore market has been declining sharply due to eBooks and eRetailing—a major problem for bookstore dependent titles.”
UPDATE: Yet, Gil Brechtel, president of the Magazine Information Network, says overall, magazine titles will be unaffected.
Brechtel esitmates that Borders did $128 million in magazine sales at retail in 2010, about 17.4 percent less than 2009. The failed book retail giant represented 3.6 percent of total U.S. magazine sales at retail.
“The bookstore magazine shopper is somewhat unique in the respect that he or she is interested in a wide variety of purchasing options,” Brechtel says. “I believe that those shoppers will shift to Barnes and Noble, other bookstore chains or even independent book stores that offer a wide selection. Due to the impulsive nature of magazines, whenever we lose locations it impacts sales, but I do think in the case of Borders, the impact will be minimal.”
Borders held an estimated 30 percent of that 90 percent of sales, but as Harrington says, declined as the business failed. Other industry watchers estimate Borders newsstand sales to represent only about 1 percent of total newsstand sales for large publishers but, overall, smaller publishers have could see a much bigger impact from the closing.
“Following the best efforts of all parties, we are saddened by this development,” says Borders Group president Mike Edwards, according to a news release. “We were all working hard towards a different outcome, but the headwinds we have been facing for quite some time, including the rapidly changing book industry, eReader revolution, and turbulent economy, have brought us to where we are now.”
Borders was initially scheduled
to be purchased by Najafi Companies
, which owns the Book-of-the-Month Club, but the deal fell through last week after creditors objected, saying Najafi would liquidate the company immediately after the sale, which proposed $215 million in cash and about $220 million of the failing company’s debt.
Borders attorney Andrew Glenn said last week that the company expects the liquidation to bring in an estimated $250 to $284 million, according to a report from Reuters.
Started in 1971 with a single location by Tom and Louis Borders, the retailer at its height had over 1,200 stores that varied between 10,000 and over 40,000 square feet.
Borders had difficulty when the industry began to transition online and into digital eReaders—areas that it’s largest competitors, Amazon.com Inc. and Barnes and Noble, have so far succeeded in. The company first filed for bankruptcy in February and closed 200 of its stores at the time
, though it initially tried to sell itself in 2008, Reuters reports
DJM Realty, a division of the company Gordon Brothers Group, which is overseeing the liquidation, will begin closing stores as early as this Friday, July 22--the whole process is expceted to be completed by the end of September.