It’s official, eReaders have claimed their first big name casualty of war. The Borders chain will go before the bankruptcy court tomorrow to submit a proposal that will see them bought out by the Hilco and Gordon Brothers liquidation company.
“Following the best efforts of all parties, we are saddened by this development,” said Borders Group President Mike Edwards. “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,” he added.
The writing on the wall has been fairly apparent since this past Jan. when Borders began delaying payments to publishers, and became crystal clear in Feb. when the company filed formally for bankruptcy protection. Under the original terms of the deal, they could be sold off at auction if any viable offers came forward, but without any manifesting themselves, the company was left with no other option than to take the offer they had from a liquidation company.
If accepted, which there is no reason why it wouldn’t be, the sale would be completed by this Thursday, and the liquidation of the remaining 399 stores would start on Friday. The final closure of the company is slated by the end of Sept.
Borders has been the second largest brick and mortar book chain for some time now and still employed 10,700 people across its stores and corporate offices.
While there are sure to have been smaller bookstore closures that can be attributed to the ride of eReaders, this is certainly the largest of its kind thus far. One of the major problems for Borders was that it did not have a strong eReader of its own like Barnes & Noble has with the Nook. While they partnered up with Kobo, the connection was never that strong, and the device never as popular with the ebook crowd.
Will more companies fall before the growing popularity of digital media? Only time will tell, but something tells us that this is not the last of such tales.
What do you think about eReaders finally claiming a retail victim?
CLARIFICATION: Hilco and Gordon Brothers reached out to us to clarify what exactly they are purchasing:
… the joint venture merely bid for and won the right to sell the inventory, fixtures and equipment within the 399 Borders locations. Ownership of the Borders assets remains with Borders.