Bloomberg reports that Borders Group, the giant United States-based bookstore chain that filed for Chapter 11 bankruptcy protection back in February, has agreed to sell its business to Najafi Companies.
The pending purchase is being directed through Najafi’s Direct Brands LLC operation, which is a direct marketer that owns the Book-of-the-Month Club brand. Before the deal is completed, however, the opportunity to purchase Borders Group must still be put out to auction (a July 19), under U.S. bankruptcy code.
Borders Group stated Najafi’s pending purchase would save it from liquidation. According to the Bloomberg report, Najafi, a Phoenix-based private-investment firm, bid US$215.1 million for Borders stores and would assume $220 million of liabilities. The deal will be up for court approval at a July 21 hearing.
Borders was founded in 1971 in Ann Arbor, Michigan; it did not open its second location until 1986. The company was acquired by Kmart in 1992, merged with rival Waldenbooks, and then spun off as Borders Group. In the late 1990s, the company attempted international expansion, but after a decade, was largely unsuccessful. By 2009, all of Borders’ directly owned overseas locations had been sold. Seventy-two stores in the UK, the company’s biggest expansion market, were closed at the end of 2009.
According to the Associated Press, the last time Borders Group saw a profit was in 2006. The company’s revenues have dropped by US$1 billion since then. At its peak in 2003, Borders operated 1,249 locations, a combination of Borders and Waldenbooks stores.
Read the complete Bloomberg report