Bookseller Borders has filed for bankruptcy protection in theUnited States and unveiled plans to close nearly a third of itsstores as it battles falling sales and a rapidly changing market.
The move comes a little over a year after the American groupclosed its UK business amid increased competition from onlineretailers and supermarkets.
The long-expected "Chapter 11" filing in the US will give thechain the chance to repair its ailing finances and shrink itsbusiness at a time when consumers are increasingly turning to theinternet rather than visiting megastores. The bankruptcy could helplarger rival Barnes & Noble, which is also struggling, by reducingthe number of competing stores.
Morningstar analyst Pete Wahlstrom said: "Barnes & Nobleshouldn't be distracted by Borders' bankruptcy. If they let theirfoot off the gas even for a second, Apple and Amazon will be readyto take the spoils."
Borders, which started out in 1971 as a small chain of bookstoresin Michigan, has struggled to adapt to sweeping technologicalchanges. Its inability to attract significant online business andits near-absence from the growing digital book market have made itdifficult for the group to keep up with Barnes & Noble and onlinegiant Amazon.
Borders operates 508 namesake superstores as well as a chain ofsmaller Waldenbooks outlets. The firm said it would close about 30per cent of its stores in the next few weeks and planned to continueto pay its employees.
Last month, UK-based HMV Group warned that it may have to closehundreds of stores and sell its Waterstone's book chain.
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