* Books-A-Million in talks for less than 50 stores-sources
* Bulk of Borders still likely to be sold to liquidators
* Sale hearing Thursday in U.S. Bankruptcy Court
By Nick Brown
NEW YORK, July 18 Borders Group Inc BGPIQ.PK
has entered talks to sell a small number of stores to retailer
Books-A-Million Inc BAMM.O while hundreds of its other
locations could be liquidated, according to two sources close
to Borders' bankruptcy process.
Books-A-Million expressed interest in less than 50 of the
book-seller's stores, said the sources, who asked to remain
anonymous because Borders' sale process is private.
It is unclear if Books-A-Million has made an official bid
or if the talks will ultimately lead to a deal, the sources
Borders was set to be sold to a group of liquidators led by
Hilco Merchant Resources if no company offered a bid to buy its
business by a Sunday deadline. No party offered a bid for the
full chain, meaning the bulk of Borders' business is still
likely headed for liquidation, the sources said.
A Borders spokeswoman declined to comment on Monday, while
a representative for Birmingham, Alabama-based Books-A-Million
did not return a call.
Interest in some stores from Books-A-Million, which bills
itself as the third-largest U.S. bookstore chain, represents
hope for at least a portion of Borders' roughly 400 stores and
Borders also has the option of accepting late bids, and
could go ahead with an auction slated for Tuesday despite its
current lack of participants, in hopes that a last-minute buyer
As of Monday afternoon, the auction was still scheduled.
Borders, which helped pioneer the concept of book
superstores, went bankrupt in February after struggling for
years to compete with larger rival Barnes & Noble Inc (BKS.N)
and Amazon.com Inc (AMZN.O). It has already closed 226 of the
642 stores it operated before bankruptcy.
Stores not acquired by a going-concern bidder will be sold
to the Hilco group, which became the default or "stalking
horse" bidder after a possible Borders sale to buyout firm
Najafi Cos, which owns the Book-of-the-Month Club, fell apart
Borders' fate will likely be determined by Thursday, when
it is scheduled to seek U.S. Bankruptcy Court approval of what
will either be a sale plan, a liquidation plan, or a
combination of the two.
Books-A-Million operates about 200 superstores and 30
smaller locations in malls, according to its 2011 annual
report. It employs about 5,300 people, roughly half of them
full-time, according to the report.
Most of Books-A-Million's superstores include in-store
cafes, which it owns and operates under its Joe Muggs brand.
In May, Borders announced it would end a cafe partnership
with Starbucks Corp (SBUX.O) unit Seattle's Best Coffee, and
said it would explore deals that would allow it to run its own
The case is In re Borders Group Inc, U.S. Bankruptcy Court,
Southern District of New York, No. 11-10614.
(Reporting by Nick Brown; editing by John Wallace)