Borders Liquidation Will Hit Power and Strip Center Landlords

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The Great Recession has claimed another big-box retailer—two years after it was declared over.

Unable to secure a buyer interested in keeping it as a going concern, Ann Arbor, Mich.-based bookseller Borders announced plans to liquidate its remaining locations late Monday. DJM Realty, which is part of the Gordon Brothers Group, became the stalking horse bidder for Borders’ assets, and will now begin disposition work on Borders’ entire remaining portfolio. It includes 259 full-line Borders locations and 114 Borders Express and Waldenbooks stores.

Borders was brought to the brink by increased competition from digital readers, combined with several years of declining sales due to a weak consumer environment. Its mega stores were also saddled with too much music- and video-related merchandise and not enough products aimed at the typical mid-income American consumer, according to Cynthia Groves, senior managing director of global corporate services with Newmark Knight Frank, a real estate services firm.

Though a Borders liquidation isn’t welcome news for retail landlords, many of whom are still dealing with wobbling fundamentals, it won’t have nearly the same impact as the liquidations of Mervyn’s, Linens ‘n Things and Circuit City a few years earlier. Many of Borders’ landlords are already having conversations with alternate retailers to backfill its stores, says Andy Graiser, co-president of DJM Realty.

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