UPDATED 12:00 EDT / JULY 22 2011

Borders Saying Goodbye, Everyone Goes Digital

Borders Books and Music remained as one of the largest book retailer for over 40 years in the industry before the invasion of eReaders and digital publishing. The company is closing its door today after it announced it was unable to find a buyer to keep it in operation. It was reported that the company filed for Chapter 11 bankruptcy last February, closing down 30 percent of the company’s facilities, including the Borders Superstore in Langhorne.

The company released a statement last Monday saying it has canceled the upcoming bankruptcy auction and will sell off its assets to two separate corporate liquidators, Hilco and the Gordon Brothers.  Both companies will administer and oversee the store closure process of the remaining Border Groups facilities. The company’s 400 remaining stores will close, resulting in 11,000 lost jobs.

Borders will accept gift cards during the liquidation sales. “Borders Bucks” will still be honored until they expire on July 31, and Border Rewards Plus members will still continue to enjoy their Border Rewards Plus discounts until August 5.

News of the liquidation came a week after a deal with Direct Brands fell through. Direct Brands, which claims to be the largest “direct-to-consumer” media distributor in the U.S., was previously going to buy Border’s assets for $215.1 million and take on $220 million in liabilities. The deal fell through because the plan was no longer supported by the deciding parties.

Here is the full letter from Border’s CEO, Mike Edwards which went out to customers who had signed up for e-mail update today;

Dear Borders Rewards Member

As I’m sure you’ve heard by now, Borders will be closing its doors after more than 40 years of igniting the love of reading in generations of customers. I am sorry to have to share this news with you as I feel you have been here right along with us as we fought valiantly to save the company. I want to personally thank you for your loyalty and support, whether you were one of the nearly 1.8 million customers who signed up for the Borders Rewards Plus program, shopped in our stores or on Borders.com, or simply took the time to e-mail or call the company to express your support.

You might be asking yourself, what happened? How could it be that there won’t be a Borders moving forward? In a nutshell, following continued negotiations and the best efforts from all parties, no bidders presented a formal proposal to keep our company operating as a going concern. Therefore, under the terms of our debtor-in-possession financing agreement, we presented to the court for approval the proposal for firms to purchase our stores’ assets and administer the liquidation process.

We had worked very hard toward a different outcome. The fact is that Borders has been facing headwinds for quite some time, including a rapidly changing book industry, the eReader revolution, and a turbulent economy. We put up a great fight, but regrettably, in the end, we weren’t able to overcome these external forces.

Going out of business sales begin in stores Friday, July 22. I encourage you to take advantage of this one-time opportunity to find exceptional discounts on your favorite books and other great merchandise. Gift cards will be honored during the liquidation sales, and Borders Rewards Plus members will continue to enjoy their Borders Rewards Plus discounts through August 5. Further, all Borders Bucks will be honored until they expire on July 31.

For decades, Borders stores have been destinations within communities—places where people have sought knowledge, entertainment and enlightenment and connected with others who share their passions. I feel privileged to have had the opportunity to lead Borders and play a role in the true and noble cause of expanding access to books and promoting the joy of reading. As a company, we cannot thank you enough for giving us the opportunity to serve you and the millions of other customers who have shopped our stores over the years. My sincerest hope is that we remain in the hearts of readers for years to come.

Many thanks,

Mike Edwards
CEO of Borders


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