Gores Group in talks to buy remaining Borders stores

The Associated Press

Borders Group Inc., which filed for Chapter 11 bankruptcy protection in February, is in talks to sell more than half of its remaining stores to private equity firm Gores Group, according to a report published Wednesday.

The discussions involve Gore purchasing more than 200 of the bookstore chain's 405 remaining stores, the Wall Street Journal reported, citing unidentified persons it said are familiar with the matter.

A deal for the stores and other assets could be in the $200 million range, the Journal reported, citing the unidentified persons. But the discussions are "fluid" and could fall apart, according to the report.

The chain also is in talks with other potential buyers, the Journal said.

Borders spokeswoman Mary Davis declined to comment on the report. A Gores spokesman did not immediately respond to an email seeking comment.

Gores, based in Los Angeles, has a portfolio of investments that includes Alliance Entertainment, Westwood One, Siemens Enterprise Communications and Big Strike Inc.

Ann Arbor, Mich.-based Borders has closed hundreds of stores and taken more than $50 million in losses since it sought bankruptcy court protection.

Borders had 642 stores before it entered the bankruptcy process. It has since closed 226 stores.

Traditional book sellers face tough competition from online sellers and discounters. Borders has made several efforts to add new types of inventory, beef up its website and enter the digital market, but critics say they came too late to improve the company's prospects significantly.

The company is negotiating with publishers, which are among its largest creditors, and it hopes to emerge from bankruptcy protection by August or September, well ahead of a holiday shopping season that accounts for as much as 40 percent of annual revenue and profits for retailers.

Company leaders have said they hope to emerge a smaller and more profitable company, but speculation has been swirling that the company may not be able to reorganize as quickly as creditors would like and could be forced to liquidate.

Published: Fri, Jun 3, 2011


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