As expected, the bankrupt Borders Group will be liquidated after it failed to find a last-minute suitor to save the 40-year-old bookseller, The Wall Street Journal reports.
The company announced this afternoon that it will ask a federal judge on Thursday to approve the previously announced sale to liquidators led by Hilco Merchant Resources and Gordon Brothers Group. Liquidation of Borders’ 399 remaining stores could begin by Friday, leading to the loss of about 10,700 jobs. What was the second-largest book chain in the United States will no longer exist by the end of September.
“Following the best efforts of all parties, we are saddened by this development,” Borders Group President Mike Edwards said in a statement. “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.”
Liquidation comes five months after Borders filed for Chapter 11 bankruptcy protection following unsuccessful attempts by the foundering chain to convince publishers and distributors to convert late payments into loans as part of an improbable reorganization plan. Late payments led some distributors, including Diamond Book Distributors, to stop shipping to the company. As Borders closed stores it continued to hemorrhage money — $132 million in April alone — and executives — 47 in the two months following the bankruptcy filing — while industry watchers started the death clock.
Early this month Najafi Cos., a private-equity firm that owns the Book of the Month Club, emerged as a potential buyer, submitting a proposal that included $215.1 million for nearly all of the bookseller’s assets, and the assumption of about $220 million in liabilities. However, creditors objected to the plan last week, setting Borders on a course for liquidation. Edwards held out hope for a last-minute suitor by Sunday’s bidding deadline — there were reports this morning of interest from Books-A-Million — but none materialized.
Retailing | A Sunday deadline passed without additional bidders for the bankrupt Borders Group, leaving a group of liquidators as the only suitor for the second-largest bookstore chain in the United States. However, The Wall Street Journal reports that the bookseller will likely entertain offers right up until Tuesday’s scheduled bankruptcy auction. The newspaper contends Borders was in negotiations late Sunday with Books-A-Million in hopes of striking a deal that would save what remains of the company, which once operated more than 1,000 locations. [The Wall Street Journal]
Conventions | Comic-Con International has released information on prices for the 2012 San Diego Comic-Con. Adult four-day passes will no longer be discounted compared to the prices of single-day badges; an adult four-day pass without the option to attend Preview Night will cost $150, while buying individual adult tickets for each day would cost $143. Adult four-day tickets with Preview Night will cost $175. Per the CCI website, “We hope that this change will encourage people to purchase only the days they will actually be attending, leaving additional badges for others who want to attend Comic-Con.”
Retailing | Borders Group, the second-largest bookstore chain in the United States, could be liquidated as early as next week if no other suitors step forward by Sunday evening, the deadline established by a federal bankruptcy court. A judge on Thursday approved the company’s motion to auction itself off after a proposal from private-equity firm Najafi Cos. fell apart over the objections of creditors. Borders, which once operated more than 1,000 stores, now has 399 locations and nearly 11,000 employees, including 400 at its Ann Arbor, Michigan, headquarters. [The Associated Press, The Detroit News]
Awards | The Young Adult Library Services Association has announced the 2012 “Great Graphic Novels for Teens” nominations, a list that includes Takio by Brian Michael Bendis and Michael Avon Oeming, Thor: The Mighty Avenger by Roger Langridge and Chris Samnee, Axe Cop by Ethan and Malachai Nicolle, How to Understand Israel in 60 Days or Less by Sarah Glidden and many more. The final list will be announced in January at the American Library Association’s Midwinter Meeting. [American Library Association]
What only two weeks ago looked like a promising proposal to save the bankrupt Borders Group suddenly fell apart Wednesday, likely leaving the remains of the nation’s second-largest bookstore chain to be picked over by liquidators.
Phoenix-based private equity firm Najafi Cos., which owns the Book of the Month Club and Columbia House, submitted a $215 million bid for the bookseller on July 1, but The Associated Press reports that creditors objected, saying nothing would prevent the company from liquidating the retailer immediately after taking possession.
The publisher-led creditor committee insists that a bid from liquidators Hilco Merchant Resources and Gordon Brothers is stronger, and would amount to between between $252 million and $284 million in cash. In a court filing, the creditors said they hoped Najafi would increase its bid, which included the assumption of $220 million in liabilities. However, Najafi is standing firm.
Although another bidder could step in before Sunday’s bidding deadline, The Wall Street Journal’s contends Borders “looks to be headed to the scrap heap.”
In a statement sent Wednesday to the bookseller’s nearly 11,000 employees, Borders President Mike Edwards said that he remains hopeful another offer will emerge. “In the meantime, as the process moves forward, we will continue to conduct business as usual,” he wrote. “Our stores remain open, and Borders.com is fulfilling orders as usual. It’s important that we all stay focused recognizing that media speculation will no doubt continue.”
The bankrupt Borders Group, the second-largest bookstore chain in the United States, announced it has received an official bid from the owner of the Book of the Month Club and Columbia House.
The Detroit News reports that the opening offer from Direct Brands, a portfolio company of the Phoenix-based private equity firm Najafi Cos., entails a $215.1 million purchase of nearly all of the bookseller’s assets and the assumption of about $220 million in liabilities.
Borders had set today as a deadline to name a stalking horse bidder, an initial bidder to make the first offer in a bankruptcy auction. The preliminary agreement establishes Najafi’s bid as the starting point; however, another company could step in with a larger offer during the auction process. Any deal will have to be approved by a U.S. Bankruptcy Court judge.
The Los Angeles-based Gores Group has been considered by may observers to be the stalking horse bidder. The company had floated a $250-million offer that would have saved about 250 of Borders’ remaining 416 outlets by transforming them into “more appealing destinations” akin to the Apple Store chain. It’s not clear how many locations Najafi would keep open.
Borders submitted an alternate proposal to the court last night that would require the liquidation by Hilco and Gordon Brothers of all of the bookseller’s assets if a sale isn’t complete by the end of the auction. According to AnnArbor.com, a liquidation would mean the loss of about 11,000 jobs.
Retailing | A federal bankruptcy judge has granted Borders Group permission to loosen the terms of its $505-million bankruptcy loan, giving the bookseller more time to line up a buyer and avoid the immediate liquidation of 40 more outlets. The book chain, which has closed 237 of its 642 stores, will file a proposal on July 1 to sell itself at a court-approved auction to a guaranteed buyer — most likely, the Los Angeles-based Gores Group. The private-equity firm has a plan that would save about 250 of the remaining Borders locations by transforming them into “more appealing destinations” similar to the Apple Store chain. [Bloomberg]
Retailing | Bud Plant, one of the initial direct-market distributors who, at one time, operated the largest chain of comic stores in the United States, has announced his retirement. In a letter to his mailing list, Plant said he is looking to find a buyer for Bud’s Art Books, his mail-order/online retail business. [The Comics Reporter]
Retailing | Jetpack Comics in Rochester, New Hampshire, has put out the call for area residents to participate in a photo shoot for retailer-specific variant cover for The Amazing Spider-Man #666: “This is not the first time Rochester has appeared on the cover of a comic book — the organizations also organized a photo shoot of Main Street that was featured on the cover of a Godzilla comic, with the city about to be crushed by the creature. [...] According to Jetpack Comics owner Ralph DiBernardo, after seeing how well the Godzilla comic sold, Marvel Comics wanted to capitalize on that success and suggested the city be featured again.” [Foster's Daily Democrat]
Retailing | As the bankrupt Borders Group weighs competing bids, Barnes & Noble — the largest book chain in the United States — reports a loss of $74 million for the fiscal year, in part because of heavy investment in its digital initiatives. However, the company saw a 50-percent sales increase at BN.com, fueled by Nook devices and digital content sold through the Nook Bookstore. [Publishers Weekly]
Passings | Lew Sayre Schwartz, one of Bob Kane’s ghost artists on Batman and Detective Comics, passed away June 7 as the result of an injury suffered in a fall. He was 84. Schwartz drew as many as 120 Batman stories between 1948 and 1953, all signed “Bob Kane,” before leaving comics after a junket entertaining troops in Korea. Eddie Campbell quotes Schwartz as saying, “’When I got back, I couldn’t stand drawing another page’ of Batman.” He went on to work in television advertising, co-founding the commercial production company Ferro, Mogubgub and Schwartz. [Mark Evanier, ComicMix]
Conventions | Scott Lewis looks at the plan by Mayor Jerry Sanders to pay for the $500-million expansion of the San Diego Convention Center: the Convention Center Assessment District, an entity that will add an additional 3 percent tax on room bills for hotels downtown, 2 percent on those out to Mission Valley, and 1 percent on those farther away. [Voice of San Diego]
One of the two private-equity firms negotiating to buy the bankrupt Borders Group reportedly hopes to save more than half of the remaining stores by taking a page from Steve Jobs’ playbook.
In a profile of rival moguls Jahm Najafi and Alec Gores, The Wall Street Journal contends a plan by the Los Angeles-based Gores Group would save about 250 of the 416 Borders outlets — most of them superstores — by transforming them into “more appealing destinations” similar to the Apple Store chain.
According to the newspaper, the 58-year-old Gores is in talks with more than a dozen companies, including Hewlett-Packard, to showcase their products in the revamped Borders stores. In exchange, Borders would offer discounts to customers downloading books from Hewlett-Packard’s e-readers in the stores. Gores, who would pay somewhere around $250 million for the bookseller’s outlets and other assets, including the website and customer list, would also “emphasize developing a more robust online business for Borders.”
Borders, the second-largest book chain in the United States, is expected to announce a bidder by July 1.
Retailing | Bankrupt bookseller Borders Group said in court papers filed Friday that it will name a stalking-horse bidder by July 1, with an eye toward completing the sale of all of its assets by the end of July. The Detroit News spotlights the two private-equity firms that have placed bids to buy at least a majority of the book chain’s 416 remaining stores: Phoenix-based Najafi Cos., which owns the Book of the Month Club, Columbia House and BMG; and Los Angeles-based Gores Group — the likely stalking-horse bidder — whose investments include Alliance Entertainment and Westwood One. [Reuters, The Detroit News]
Legal | Peanutweeter, a blog that combined frames from Charles Schulz’s Peanuts strips with real, out-of-context tweets, has been taken down by Tumblr as the result of a Digital Millennium Copyright Act complaint from Iconix Brand Group, which acquired a majority stake in the Peanuts assets last year. One blogger, however, argues the blog should be considered fair use. [RIPeanutweeter, Boing Boing]
Broadway | As of last night’s preview performance, Spider-Man: Turn Off the Dark is officially “frozen,” meaning there will be no more script rewrites, new lyrics or altered choreography before the $70-million musical opens on Tuesday. In fact, the producers are confident enough to invite critics to attend previews over the next three nights, with their reviews to be published after the opening. “The show, in my opinion, is bulletproof at this point,” Reeve Carney, who stars as Peter Parker, told The New York Times. “I mean, as bulletproof as anything can be. And we want to do right by the people who stood by us, to help this show be seen for what it is.”
However, it’s not all good news for opening night. The New York Post reports that producers hoped the Empire State Building would be lit in red and blue on Tuesday, but the landmark’s owners would do it only if a change were made to the show: specifically, that the climactic battle between Spider-Man and Green Goblin be moved from the Chrysler Building to … the Empire State Building. [The New York Times]
Retailing | Najafi Cos., a Los Angeles-based private equity firm, is reportedly interested in buying at least half of the 405 bookstores operated by the bankrupt Borders Group. [Bloomberg]
Crime | Josue Rivera, the comic artist known as Justiniano, pleaded not guilty Tuesday to charges of possessing more than 100 photographs and videos containing child pornography. Rivera was arrested in Connecticut on May 10 following a July incident in which police say he mistakenly gave a funeral home director a thumb drive containing 33 files classified as child pornography instead of the one containing photos of a deceased relative. Police later seized Rivera’s computer and found 153 files of suspected child pornography. On Tuesday, the 38-year-old artist pleaded not guilty to first-degree possession of child pornography, and requested a jury trial. [Connecticut Post]
Retailing | Days after it was announced that media conglomerate Liberty Media offered $1 billion to buy Barnes & Noble, supermarket magnate Ron Burkle has revealed he bought another 603,000 shares at $18.49 a share, raising his stake in the bookseller to 19.74 percent. The Wall Street Journal suggests that Burkle, already the book chain’s largest shareholder, may be “playing a potentially dangerous game of chicken to force a takeover price for Barnes & Noble even higher.” [Deal Journal]
Retailing | Borders Group, the second-largest book chain in the United States, reported a loss of $132.3 million in April, its second full month in bankruptcy. That figure follows on the $52.6 million loss reported in February and March as the bookseller sought Chapter 11 protection and began liquidating 226 locations. [Detroit Free Press]
Publishing | Ira Rubenstein, executive vice president of Marvel’s Global Digital Media Group, has left the company to become executive vice president of digital marketing for 20th Century Fox. He begins the new job in Los Angeles on Monday. Rubenstein joined Marvel in 2008 after 12 years at Sony, and oversaw the launch of the publisher’s digital subscription service. His departure comes less than two weeks after news surfaced that Ron Perazza is resigning as DC Entertainment’s vice president of online. [Variety]
Publishing | Ada Price surveys the graphic novel exhibitors at this year’s BookExpo America, which opens today in New York City. [Publishers Weekly]
Publishing | As the fallout mounts from the revelation that former California Gov. Arnold Schwarzenegger fathered a child more than a decade ago with a member of his household staff, plans to revive the Terminator star’s acting career have been put on hold — a move that now extends to The Governator, the comics and animation project co-developed by Stan Lee. “In light of recent events,” representatives announced last night, “A Squared Entertainment, POW, Stan Lee Comics, and Archie Comics, have chosen to not go forward with The Governator project.” However, Entertainment Weekly notes the statement was revised two hours later, putting the project “on hold.”
Unveiled in late March, on the cover of Entertainment Weekly, no less, The Governator features a semi-fictional Schwarzenegger who, after leaving the governor’s office, decides to become a superhero — complete with a secret Arnold Cave under his Brentwood home that not even his family knows about. “We’re using all the personal elements of Arnold’s life,” Lee said at the time of the announcement. “We’re using his wife [Maria Shriver]. We’re using his kids. We’re using the fact that he used to be governor.” But even before the couple’s separation became public, producers had backed off depicting Shriver and their children. [TMZ, Entertainment Weekly]
Publishing | The drop in year-over-year sales in the direct market slowed in April, with periodicals slipping 1.75 percent and graphic novels just .84 percent. Overall sales were down 1.46 percent for April and 6.5 percent for the first four months of the year. Marvel topped Diamond’s comics chart with Fear Itself #1, while DC led the graphic novel category with the 15th volume of Fables. [ICv2.com]
Crime | Police evacuated the bus terminal in downtown Ann Arbor, Michigan, Friday afternoon after a suspicious package was discovered across the street. The Michigan State Police bomb squad was called in, and it was determined the mysterious package was merely a briefcase-shaped media kit promoting Acura’s involvement with Marvel’s Thor. A writer for Automobile, whose offices are next to the terminal, had discarded the “S.H.I.E.L.D. Assessment Test” kit in the recycling bin, but it wasn’t picked up — apparently because it isn’t recyclable. [WXYZ, Jalopnik]
Retailing | DC Comics has advised retailers to immediately unplug the $150 Green Lantern Animated Light Up Display after one of the signs caused a small electrical fire Saturday at Rick’s Comic City in Nashville. Other retailers have reported the smell of burning plastic coming from the displays. The publisher will notify stores in the next few days how it will rectify the problem.[ICv2.com]
Retailing | Borders Group lost more than $50 million in February and March as it sought bankruptcy protection and began liquidating 226 stores, a new court filing shows. [The Wall Street Journal, Publishers Weekly]
Publishing | Mike Searle, former editor of Wizard Entertainment’s defunct InQuest Gamer magazine, reportedly will replace Mike Cotton at Wizard World Digital. Cotton, who had been co-chief pop culture editor, left the company on Friday. [Bleeding Cool]
Conventions | Forces of Geek rounds up news from last weekend’s Boston Comic Con. [Forces of Geek]