Federal judge reportedly approves Books-A-Million purchase of 14 Borders store leases for about US$934,000; Books-A-Million to take over leases by Sept. 20, expands into New England
August 30, 2011
(Bangor Daily News)
– A federal bankruptcy court judge has reportedly approved a deal allowing Books-A-Million to buy the leases of 14 Borders stores, including those in Bangor and South Portland.
Alabama-based Books-A-Million, now the nation’s second largest bookseller after Barnes & Noble, initially had sought to buy out the leases of 30 to 35 Borders stores, but the deal fell through earlier this summer.
The new deal was announced last week, and the Wall Street Journal reported late Monday that Judge Martin Glenn of the U.S. Bankruptcy Court in Manhattan approved it. A spokeswoman for Borders declined to comment for this story to the Bangor Daily News, and executives at Books-A-Million did not return calls for comment from the newspaper made late in the day.
According to the WSJ story, Books-A-Million plans to take over the leases by Sept. 20. The company agreed to pay roughly $934,000 for the leases.
Other stores listed in the court filings as being part of the deal include those in Concord and West Lebanon, N.H., as well as stores in Connecticut, Maryland, Ohio and New Jersey. The deal gives Books-A-Million its first stores in New England, expanding its geographic footprint.
In July, the Ann Arbor, Mich.-based Borders Group announced it was liquidating, and would be out of business for good this fall. At its peak in 2003, Borders operated 1,249 Borders and Waldenbooks stores. By the time it filed for bankruptcy protection in February, it had 642 stores and 19,500 employees. Since then, the number of Borders stores has fallen to fewer than 400 as the company laid off thousands of workers.
The Bangor and South Portland stores are still open.
Books-A-Million is based in Birmingham, Ala. It operates 231 stores in 23 states and the District of Columbia.
The company faces some of the same pressures as Borders and other traditional booksellers — most notably, the trend of readers toward e-readers, eschewing traditional paper books.
That was evidenced by its quarterly earnings report, where the company reported a net loss of $2.9 million, compared with profits of $1.9 million in the same period in 2010.
In its second-quarter filings, reported to the Securities and Exchange Commission on Aug. 23, Books-A-Million said its revenue fell 11.4 percent to $106.4 million from $120 million last year.
Revenue in stores open at least a year fell 12.9 percent. The comparison is a key gauge of a retailer’s financial health because it excludes stores that opened or closed during the year.
“A soft publishing lineup, the effect of e-book migration and the impact of Border’s liquidation all contributed to the decline in comparable-store sales,” said CEO Clyde Anderson in the filings.
A Monday story by Publisher’s Weekly analyzed data from Bowker’s Pub Track Consumer service, and noted that Books-A-Million’s product mix skews toward religious books, with roughly 17 percent of the company’s sales in that category, compared to 7 percent at Borders and 10 percent at Barnes & Noble.
Publisher’s Weekly also reported that the data show that the chain’s customers “are generally less affluent than those who shop at its competitors and have less education.”
“It will be interesting to see if BAM changes its merchandising and marketing approach in the new locations it is moving into or sticks to what has worked for it so far,” the Publisher’s Weekly article mused.
Material from the Associated Press was used in this report.