The Ann Arbor based company Borders Group Inc. announced its plans to liquidate on July 18, about five months after the chain declared Chapter 11 bankruptcy.
Starting July 22 and continuing through September, Borders is expected to close 399 stores and lay off more than 10,700 employees nationwide, according to Borders media contact Mary Davis. However, she said she couldn’t confirm exactly when the East Liberty Street location will close.
Davis added the decision was “very difficult” for the company, especially since they already closed more than 200 stores after filing for bankruptcy on Feb 16.
Ann Arbor Mayor John Hieftje said in an interview with The Michigan Daily that he had anticipated the liquidation, particularly amid a difficult economic climate in the state, and said while the liquidation will eliminate jobs, it will also bring new opportunities to the city.
“Of course I really feel bad for the people who are losing their jobs, but it won’t have major effects on the city,” he said. “In some ways, at least as far as the downtown store is concerned, it was inevitable, and we can move forward. It’s an opportunity to bring in new businesses that will be there for awhile.”
Hieftje said the closures are especially disappointing because of the historical aspect of the company in Ann Arbor, which was founded in the city 40 years ago.
“This was the original location, and it’s sad to see (the headquarters and store) go,” he said.
In a July 18 press release, Borders President Mike Edwards said he was saddened that his business can no longer serve as a resource for people around the nation to enjoy literature, entertainment and other forms of media.
“For decades, Borders stores have been destinations within our communities, places where people have sought knowledge, entertainment, and enlightenment and connected with others who share their passion,” Edwards said. “Everyone at Borders has helped millions of people discover new books, music, and movies, and we all take pride in the role Borders has played in our customers’ lives. I extend a heartfelt thanks to all of our dedicated employees and our loyal customers.”
According to a statement from Najafi Companies, the closure comes a couple weeks after they failed to acquire Borders.
“We are saddened by the news announcing the imminent liquidation of Borders, as we had hoped for a different outcome,” the statement says. “However, last week the debtor selected the liquidators’ bid over our proposed plan to keep Borders operating as a going concern, a decision that is a detriment to Borders’ employees, suppliers and customers.”
University Professor Donald Grimes, an expert on Michigan’s economy, said the liquidation will have a significant effect on Ann Arbor, especially because the headquarters — and its approximately 400 employees — is located here.
“It’ll be detrimental to Ann Arbor because of the loss of the jobs at the headquarters,” he said.
George Fulton, University professor and expert on Michigan’s economy, disagreed that the closures will have an immense effect on the city.
“It’s a loss, but I think the city will do fine,” he said.
Fulton added that while the advancement of technology hurt Borders, it wasn’t the company’s sole demise since other bookstores have survived despite the shift from paper books to eReaders, like Amazon’s Kindle and Barnes & Nobles’ Nook.
However, according to the Borders press release, Edwards credited eReaders as additional competition that detracted business away from his company.
“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 said.
Ed Koster, owner of David’s Books — a bookstore formerly located at 516 East William Street — echoed Hieftje’s sentiments and said the Borders liquidation is upsetting but expected, considering the economy. He said bookstores have many similarities to record stores and foreshadowed that bookstores will continue to die out as technological advances cause books to become increasingly digitalized, just like the music industry.
According to the press release, the official proposal will be presented at a New York bankruptcy court hearing on Thursday.