Premium ContentMouse over Home then click on Premium Content for information.For months, Omahans heard about Borders stores closing all over the country.
For months, Omahans heard that the three metro-area Borders stores would be spared.
But now it appears that all of the stores will be closing by this fall.
The company's closures will mean lost jobs for 10,700 people, disappointed customers and gaping holes to fill in the retail real estate landscape.
The bookseller announced Monday that it would have to proceed with liquidation because a buyer had not emerged. On Thursday, the 40-year-old Michigan-based company plans to ask a federal judge to appoint liquidation firms to oversee going-out-of -business sales at its 399 remaining stores.
The liquidation process is expected to begin Friday and conclude by the end of September.
Tuesday morning, the Omaha location at 72nd and Dodge Streets was busy. Some shoppers wanted to get out of the heat with a good book and a glass of tea. Others came to use gift cards to make sure they didn't go to waste.
Others wanted to imagine nothing was different.
"I could spend hours in here," said Zsa Zsa Willett, a fifth-grade teacher in the Westside school district. She usually supports the independent Bookworm at Countryside Village. But she had gift cards her students had given her and wanted to get some vacation reading.
After she learned of the pending closure Tuesday, "I wanted to make sure I utilize them," she said of the gift cards.
Scott and Kari Meyer, in town from Dow City, Iowa, were surprised when they arrived at the Borders at 72nd and Dodge Streets to find it open. "I thought it happened six or seven months ago," Scott said.
Although they stopped at the store on most visits to Omaha, they didn't always make a purchase. "We browse here, buy online. Unless there's a sale," he said.
Analysts said Borders was in this situation because it hadn't moved aggressively to do its own online sales and get into e-readers as quickly as its competition. Borders officials decided a decade ago to pay Amazon.com Inc. to run its website.
"Borders divorced themselves from the online customer by allowing Amazon to close the sale," said Michael Norris, an analyst for Simba Information Inc. "I'm convinced that's the moment things went bad for them."
Meanwhile, the brick-and-mortar business became increasingly difficult. Selling CDs and DVDs had become an important part of Borders' business, generating $600 million in sales, or 17 percent of total revenue, by fiscal 2006. Three years later, CD and DVD sales had dropped by 38 percent as downloading services such as Apple's iTunes took market share and more consumers shopped online.
In February, Borders filed for bankruptcy protection and closed about a third of its 650 stores.
As recently as last week, Borders officials had hoped the parent company of the Book-of-the-Month Club could rescue it from the brink, but objections from creditors blocked the deal.
In the Omaha store Tuesday, Kari Meyer said she was shocked that no buyer was willing to take on the chain.
"It's sad. It's the end of an era," she said.
One regular shopper was too broken up about the closing to share her thoughts with a reporter.
Patti Mingarelli thought about her children.
She often brings Talitha, 18 months, and Pasquale, 13 months, to Borders to let them wonder at all the books. Tuesday, each held on to a child's story as mom browsed the sale rack in the store's entrance.
"I'll have to buy more online, but with kids, it's nice to have them see the books."
Mingarelli and her husband, who learned of the closings Tuesday, were sad that one of their favorite places to grab a coffee and read a magazine will become a thing of the past.
"I was really disappointed," she said. "It's a great place to hang out. A great place to get books."
Besides the disappointed customers, Borders' liquidation plan also has met objections from creditors, Texas and landlords.
Kobo, a Toronto-based maker of electronic books whose eReader is sold at Borders stores, said it should have the right of first refusal for any transfer of Borders' 11 percent stake in its equity and said Borders shouldn't be allowed to sell information that Kobo has licensed to Borders.
In Texas, the state comptroller objected to Borders' motion to liquidate because it doesn't contain a requirement that the liquidators of Borders pay federal and state taxes. In the bankruptcy of Ultimate Acquisition Partners in Delaware, about $2 million of sales tax collected under Gordon Brothers' and Hilco's watch went unpaid, lawyers for the Texas authority wrote.
Lawyers for Macerich Co. and other Borders landlords have said the new sales motion isn't consistent with Borders' past practices and violates "critical landlords rights and protections" under leases.
The three Omaha-area locations are all in prime spots and are all very large buildings that could be tricky to fill.
The building at 72nd and Dodge Streets is 44,085 square feet, and the one near 132nd Street and West Maple Road is 31,123 square feet, according to Douglas County assessor documents. The Papillion store, just across from Old Navy at Shadow Lake Towne Center, 7775 Olson Dr., is similar in size.
John Lund, CEO of the Lund Co., said the locations of each of these stores — in high-traffic, visible and sought-after locations — will help.
"Omaha's been very resilient," he said, in filling vacancies left by major retailers. He said it is highly likely new-to-market national or regional retailers will be interested in the spaces. And it could be possible that one or more of the spaces can be subdivided and filled by smaller retailers.
"I'm certainly surprised and disappointed. Anytime you get large box stores that vacate you've got to deal with the aftermath," Lund said. "These are all three great locations — good visibility, access and tenants they're surrounded by. I would venture to say we'll find replacement box users or a new use for the sites."
This report includes material from Bloomberg News and the New York Times.
Contact the writer: 402-444-1037, michaela.saunders@owh.com, twitter.com/SaundersM
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