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Borders will close 200 stores: "Everything must go"

by Kelly MacNeil on February 18, 2011

After declaring Chapter 11 bankruptcy, Borders will hold fire sales at 200 stores that will close between now and April, reports CNN.

Borders announced bankruptcy following four years of declining sales. The national book chain owes $41 million to Penguin Putnam, $37 million to Hachette Book Group and $34 million to Simon & Schuster.

For consumers, the liquidation sales may begin as early as President's Day weekend.

"It's quite possible that some, if not all of the stores on the list of 200, might have a sale this weekend," Michael Norris, a senior analyst with Simba Information, told the news source.

"Specifications about [liquidation sales] will be revealed in the coming days and weeks," said Borders spokesman Donald Cutler.

According to Bloomberg, Borders has not embraced digital books the way Barnes & Noble, its main chain store competitor, has done with its Nook.

“If digital is the one area of growth in the industry, you have to set your sights on an Amazon and an Apple, and not worry about the other physical booksellers,” Morningstar Investment Services analyst Peter Wahlstrom told the news source.

Borders decided to partner with Sony and Kobo Inc. for its digital books business, while Barnes & Noble manufactured its own Nook e-reader running on the Android platform. Barnes & Noble introduced the Nook Color in advance of the 2010 winter holidays.

According to Bloomberg, sales at Barnes & Noble dropped 3.3 percent in the quarter that ended on October 30, while Borders' sales dropped 12.6 percent.

Borders' bankruptcy is likely to positively affect Barnes & Noble sales, but analysts say that the remaining book giant's real competitors are Amazon, Apple and Sony.

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