Whither Borders?

The Wall Street Journal reports "Borders is on the brink of liquidation after the collapse of a deal with the Najafi investment firm… The development raises the likelihood that Borders will soon have to close its remaining 399 stores, lay off some 11,000 people and go out of business…"

The WSJ also cited a letter Borders President Mike Edwards sent to employees. Several anonymous sources sent me that letter:

"As you know, we have been working towards a successful sale of the Company and I wanted to take this opportunity to update you on the latest developments.
Under the previously announced sale process, Borders had two alternate options for a Stalking Horse bidder: the Najafi proposal, or a group including Hilco and Gordon Brothers, who would purchase the store assets of the business and undertake an orderly wind-down.  Late this afternoon, Najafi informed us that they have decided to withdraw as the stalking horse proposal, and therefore we will submit the Hilco and Gordon Brothers proposal to the Court for the purposes of serving as the Stalking Horse bidder at the auction next week.

While we regret Najafi's withdrawal as the Stalking Horse bidder, we remain hopeful that they or other potential bidders who are interested in operating Borders as a going concern will choose to participate in the auction process on July 19.

In the meantime, as the process moves forward, we will continue to conduct business as usual.  Our stores remain open, and Borders.com is fulfilling orders as usual.  It's important that we all stay focused recognizing that media speculation will no doubt continue."
Here's what that means. Hilco and Gordon are a liquidation company. Should no other bidder step forward, and they make a successful purchase next week, the transition would take place July 29th, at which point all remaining Borders stores would begin liquidating their merchandise, and close.