Remaining Borders stores in Oak Brook, Schaumburg, Wheaton, Naperville, Geneva, Gurnee, Algonquin and elsewhere are expected to close under a plan announced Monday by the bookstore chain's parent company.
Borders Group, based in Ann Arbor, Mich., is seeking court approval to liquidate its 399 stores after it failed to receive any bids that would keep the 40-year-old chain in operation and canceled an auction process. The U.S. Bankruptcy Court of the Southern District of New York is set to approve the move on Thursday.
Liquidation sales could start as soon as Friday, typically starting with 20 percent off all merchandise and continuing through September or until all merchandise is sold, said Borders spokeswoman Mary Davis.
The closings would deal a blow to suburban shopping districts.
"We hate to see a loss of any retail component in the Northwest Suburbs, especially in Schaumburg, which is known as a shopping destination," said David Parulo, president of the Woodfield Chicago Northwest Convention Bureau in Schaumburg.
Area stores include 1500 16th St., Oak Brook, near Oakbrook Center; 1540 Golf Road, Schaumburg; 101 Rice Lake Square, Wheaton; 336 S. Route 59, Naperville; 1660 S. Randall Road, Geneva; 6971 W. Grand Ave., Gurnee; and 2216 S. Randall Road, Algonquin.
Others include: 150 N. State St., 600 W. Madison St., both Chicago; 95th Street and Ridgeland Avenue, inside Chicago Ridge Mall, Chicago Ridge; 1144 Lake St., Oak Park; 1 N. LaGrange Road, La Grange; and 15260 S. LaGrange Road, Orland Park. In a statement, Borders President Mike Edwards said the changing book industry and the economy hastened the chain's demise.
Borders had been seeking a new white knight bidder after a $215 million bid by private-equity firm Najafi Cos. dissolved late last week. Creditors and lenders argued the chain would be worth more if it liquidated immediately.
Hilco Merchant Resources and Gordon Brothers Group will liquidate the chain under terms of the agreement.
Borders Group helped to pioneer the big-box bookseller concept and once operated more than 1,000 stores before shrinking to its current 400.
The liquidation is a "sad day in book publishing's history and will do severe and lasting damage to the industry's ecosystem," said Simba Information senior trade analyst Michael Norris.
"There are so many people who buy a small number of books in a given year that the absence of a nearby store that they like can really curb how much they buy," he said. "They won't go to another store or online like flicking a switch."
The disappearance of Borders would likely hurt e-book sales as well, since some e-book readers visit bookstores to see what books they might like to read before buying the electronic version for their e-book reader, Norris added.
Borders' move to close 228 stores while it reorganized in bankruptcy protection already increased the collective vacancy rate of shopping centers that contained a Borders to 9.3 percent from 4.2 percent, estimated Chris Macke, senior real estate strategist at CoStar Group, the nation's largest provider of real estate data. He calculated the liquidation of the rest of the chain could increase the vacancy rate on that same basis to 18.8 percent. Borders stores average about 25,000 square feet, about half the size of a football field.
While some of the space vacated by Borders has been filled with stores like Best Buy, Dick's Sporting Goods and Books-A-Million, or broken up to accommodate several smaller merchants, leasing has been slow, real estate analysts said.
Borders Group Inc., based in Ann Arbor, Mich., filed for bankruptcy protection in February. The company started with a single store in 1971, and helped pioneer the book superstore concept along with larger rival Barnes & Noble Inc. It was brought down by heightened competition by discounters and online booksellers, as well as the growth in popularity of electronic books. It currently operates about 400 stores, down from its peak in 2003 of 1,249 Borders and Waldenbooks, and has about 11,000 employees.
•Daily Herald wire services contributed to this report.