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Posted on 07/15/2011 10:30:49 AM PDT by re_tail20
The Borders Group may be near liquidation after a committee of its unsecured creditors on Wednesday rejected a proposed takeover by the Najafi Companies, a private equity firm.
In a motion filed with the federal bankruptcy court in Manhattan, the committee said it was concerned that the agreement could allow Najafi to buy the company at a low price and then liquidate Borders later without letting creditors benefit.
The committee’s motion essentially argued that Borders might be worth more as a court-supervised liquidation than as a company sold to a bidder.
“It neither maximizes value for the benefit of unsecured creditors nor provides for the other benefits of a going concern,” the committee wrote in the court filing.
The preferable alternative, according to the committee, is to fall back upon a bid proposed by a group of liquidator firms led by the Gordon Brothers Group and Hilco. Such firms wind down failed companies and sell their property with the aim of maximizing money for creditors. They have been involved in closing dozens of retailers in recent years, including Circuit City and Linens ’n Things.
The rejection of Najafi, a private equity firm that owns the Book-of-the-Month Club, does not necessarily consign Borders to liquidation. The company is scheduled to begin a court-supervised auction on July 19, and Najafi and other potential bidders, like the Gores Group, can still bid.
It is unclear whether the bidder preferred by Borders will re-emerge in the sales process next week. As the new stalking-horse bidders, the liquidation firms have set the floor for the auction. If they prevail, they will wind down the 40-year-old bookseller, which has already closed 237 stores since filing for bankruptcy protection this year. Borders has about 399 stores remaining.
(Excerpt) Read more at dealbook.nytimes.com ...
I built one of their first stores that took them national. I was a huge success and led to their original growth.
They got so big that they sold out and were then ruined over the last fifteen years. What a shame. Their origninal approach was golden.
The Carmel Mountain store in San Diego was forced to closed when the landlord doubled the rent. They were barely solvent before that occured.
I’ve had one book on order since May 2010. My credit card expired. I updated it. A security breach caused that card to be canceled. I updated to my debit card. A security breach caused the debit card to be canceled. I updated the order to reflect the current card. Still no book.
One day I came in and found thosse mags, and all other gun/knife/hunting mags gone.
When I asked an attendant, she looked at me with horror and disgust and said they had made the decision not to carry such "potentially offensive" and controversial materials.
Of course, as I left the store I had to pass by the prominent display of homo literature set up right by the front door.
Never spent another dime with them.
This is a shame. I’ve always enjoyed going there, and found a lot of books I couldn’t find in any other store. Of course, that was before Amazon, and I guess that’s part of the reason Borders is failing. I still spend a good amount at Borders, hoping to do my small part to help, because I can’t imagine a world without bookstores. All that is left around here is Barnes Noble, and there aren’t that many of them.
I would go on once a week or so for at least a browse and would purchase books fairly often, too.
It was a very nice way to kill a half-hour or 45 minutes and the time spent kept me up on what was current.
I HATED seeing those stores go. Now all we have left is a used bookstore. I love that place too and hope it can hang on.
Borders failed because it kept building big box stores while everyone else was designing easy to use websites.
It wasn’t a winning business plan.
The website was one complaint I had against them. I never ordered anything from Borders online, but I like to check the store inventory for something I want before I head over to the store, and a big chunk of the time it didn’t work.
I order a lot of books and CD’s from Amazon now. I’ve considered ordering from Borders, but it seems the availability on Amazon is always better, and its delivery service can’t be beat.
I still like bookstores, though, and it’s too bad Borders didn’t judge the changing market that well.
I miss Borders as well. When my wife and I travelled to Santa Barbara she would shop and I would go into Borders, get a book, some coffee, and read. After the wife finished I would buy some good history books and we would come home. A lovely day!
Well said, Truthguy. We’re sinking fast into a post-literate society.
They failed for a couple of reasons because they failed to adapt quickly. Who buys a paper book anymore? People are reading books on tablets and other electronic devices now. Amazon and other competitors are cheaper.
I personally like holding the book in my hand. I liked Borders because they had some items I could not find at other stores. The couple I visited were relatively clean.
1. Incompetent management, one that could not adapt Borders Books for the times.
2. Borders doesn't have a fallback position as a major mail-order/online retailer like Barnes & Noble does (I've bought several books through the B&N website).
3. Borders didn't created its own branded e-book reader like Amazon first did with the Kindle in 2007 and Barnes & Noble did with the Nook in 2009.
I'm seriously considering buying a B&N Nook Simple Touch e-book reader, mostly because 1) you can "preview" books for free at any B&N store that has Wi-Fi access and 2) the Nook supports e-book lending from libraries using the ePub format.
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