NEW YORK — Borders Group Inc.’s preliminary or “stalking-horse” agreement to sell itself to private investment firm Najafi Companies could signal its shift toward digital operations.
The $215 million deal, announced in court papers filed late Thursday, would make Borders a subsidiary of Direct Brands, a media distribution firm owned by Najafi. The buyers would assume $220 million of Borders’ liabilities on top of the purchase price, according to the filing.
The sale to Direct Brands, an online and catalog-based supplier of DVDs, CDs, and books, could foreshadow the company’s move away from the superstore retail model, said bankruptcy attorney Richard Bendix, who is not involved in the case. “The free-standing store seems to be on its way out as a business model because it’s cheaper to go online, either to buy the physical book online or buy the book digitally,” said Mr. Bendix, of law firm Dykema Gossett.