Finance and Economic

The idea popped into Laura Stude’s head when she happened on a stack of legacy books while shopping last year for a Mother’s Day gift.

Eyeing the blank-paged journals, with prompts for parents and grandparents to reminisce about their lives, Laura Stude pondered a 21st Century alternative.

“Instead of writing something that no one could read or might get burned in a house fire, I thought ‘How cool would it be if you could put something online,’” Stude recalled.

The thought became a concept that Stude thought might appeal to appeal to the aging baby boomer population.

Last week, she decided to see if it had legs.

Startup Weekend, an event that has gained popularity at worldwide venues since the economy turned the mega-corporation world on its head, made its St. Louis debut a week ago tonight when 41 entrepreneurs brought an equal number of business proposals to a downtown incubator for information technology ventures.

Each arrived with a 60-second pitch outlining the strategies they envisioned as money-makers, the next social media phenomena or, in the case of one participant hoping to “create a better world through kindness and community,” a software application aligned with an over-arching goal of “changing the world.”

The proposals were put to a vote.

When the balloting was completed, teams headed by the 12 finalists - Stude included - adjourned to the conference rooms where they would spend nearly every hour of the next two days perfecting entrepreneurial ventures. Their ideas ranged from an application to synchronize smart phones with concert arena light shows to a software program designed to promote better childhood behavior.

It was Super Bowl weekend for would-be entrepreneurs like Alex Kliman, 26, sales representative by day and formulator of grand ideas by night.

“I’m one of those people who thinks they have a million dollar idea every time they wake up,” said the Dogtown resident, the creator of the pulsating “event-driven” smart phone program he envisions illuminating the concert halls and sporting venues of the future.

It became clear from the get go that time is the enemy at Startup Weekends: Come Sunday night, a panel of four judges would observe presentations from each team and select a winner based on originality, feasibility, marketability and, not least, financial viability.

The stakes were not high.

When I asked the St. Louis Regional Chamber and Growth Association executive who helped coordinate the weekend about the first place prize, Jay DeLong responded by patting me on the back.

OK, there was a bit more incentive than that.

But not much: The teams were vying for a break on the rent for incubator office space, gift certificates from downtown businesses and tee-shirts.

Still, the contestants went at it like a million bucks was on the line, working until midnight Saturday despite a schedule that called for adjournment in the early evening.

Most of the teams were comprised of total strangers.

Carl Foster of  Chicago joined forces with University City’s Stude because the idea he brought to the table - which didn’t muster enough votes - closely matched her online legacy book project.

With an eye toward the myriad obstacles standing in the way of successful start-ups, Stude assembled a crew capable of covering all the bases from software and website development to marketing to projected financial outcomes.

“Everybody brought a unique skill that moved the chains forward,” she said.

The team didn’t let her down.

They looked for ways to fine-tune the band-width to accommodate baby-boomers who prefer video over the written word business cards. They tweaked Stude’s four-minute presentation the judges and convinced the team leader to abandon her pet name for the project - “Time in a Bottle” - in favor of “StoryBucket.”

Laura Stude went before the judges shortly before 6 o’clock Sunday night.

“Do it before you croak,” she said, launching the presentation with the catch phrase formulated by the team barely an hour before. “Fill the bucket, before you kick the bucket.”

Supported by a PowerPoint presentation, she walked the judges through the various attributes of the project, in particular a process that is a marked upgrade over the arcane pen and paper.

The wait for the judges’ decision, slightly more than hour, seemed interminable for a 100-plus would-be entrepreneurs who’d spent the last two days burning through creative energy like coal.

Dragging out the tension a few minutes longer, the judges reviewed each entry prior to announcing the winners.

They praised StoryBucket, but advised that success rested on the ability to differentiate itself from Facebook, Flickr and other social media that lend themselves to story sharing.

It served as a hint of what lay ahead.

The winning team, “Analytic Just-Us” began the weekend as an amorphous proposal for a comprehensive database to provide background to attorneys preparing civil and criminal cases.

By Sunday the idea had evolved into an entry with the potential to analyze the decisions of juries and judges in every corner of the country.

“What Money Ball was for baseball this will be for lawyers,” predicted Andrew Winship, a St. Louis attorney and a member of the “Analytic Just-Us” team.

Though judges didn’t rank StoryBucket among the top five ideas, Stude remained upbeat. An idea born of happenstance during a shopping excursion had survived two days of intense scrutiny and readjustment.

Even more encouraging, Stude received word via Twitter following her presentation that an investor might be interested in helping her further pursue the StoryBucket proposal.

“If nothing else, it was good for affirmation,” said Stude, vowing, “this is just the start.”

QUOTE OF THE WEEK

“It’s a real culture shock. After tax, $150,000 is not much. It probably won’t even pay for the private-school education tabs for their kids. It’s going to be a tough time of readjustment.” - New York compensation consultant James Reda on the hardships reduced bonuses incur on Wall Street executives.

Source: The New York Post

BY THE NUMBERS

5.6 million - Number of health care sector jobs the U.S. economy is expected to add from 2010-2012.

Source: The U.S. Bureau of Labor Statistics’ Employment Projections

FINAL WORD

“I call myself frayed white collar - part of the privileged poor. I have a college degree, a career and an array of middle-class, working-class and more economically privileged friends; together we are a fairly good representation of the 97 percent, or maybe the 95 percent. And most of us are hard-pressed; even my teacher friends, making about $60,000 a year, are perpetually flat-lined economically, eking across each month’s finish line thanks to credit cards.” - Christopher D. Cook in an essay on the humility of applying for food stamps.

Source: Salon

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Germany’s controversial suggestion of a European debt regulator with direct control over Greece’s spending turned out to be such a touchy subject that Chancellor Angela didn’t even mention the idea to the leaders at Monday’s European Union summit in Brussels.

In what was seen as a blow for Germany’s push for tighter European integration, national sovereignty appeared to have won the argument Monday.

Over the weekend, Germany had made a pre-summit call to give a powerful European debt watchdog direct control over Greece’s budget decisions. Despite often stinging criticism over how Greece runs it financial affairs, having a foreigner directly run a nation’s budget found no takers among the other leaders.

Even Merkel’s staunch ally, Nicolas Sarkozy, who is so close that they have morphed into the diplomatic couple “Merkozy”, could not back her.

“We cannot put a country under trusteeship and run it from abroad. It would not be reasonable, not democratic, and, in short, not efficient,” Sarkozy said after the summit.

Going into the summit, German Economics Minister Philipp Roesler had suggested the EU should take over the “leadership and supervision” of Greece’s budget.

Athens is teetering on the brink of a disorderly default and is seeking a key agreement to get a second euro130 billion ($170.43 billion) bailout. The country has been surviving since May 2010 on an initial euro110 billion package of rescue loans from other eurozone countries and the International Monetary Fund.

Greece must also cut its deficit further and push through painful public sector layoffs and sell off several state companies, and its partners are unhappy with the pace of action.

Still, a “Sparkommissar” in German_ or “savings Czar” _ was beyond the pale for Greece.

“Our partners do know that European integration is based on … the respect of their national identity and dignity,” Greek Finance Minister Evangelos Venizelos wrote in an angry retort.

“I am certain that the political leaderships of all European nations _ particularly bigger nations that bear increased responsibility for the course of Europe _ are aware of how friends and partners, who have joined their historical destinies, raise questions,” he wrote on Sunday.

Merkel got the message.

“I believe that we are having a discussion that we shouldn’t be having,” she said entering the summit.

Other European leaders have said that the Commission, the EU’s executive, needed the power to block bad spending decisions, but not only in Greece but also other highly indebted countries.

But taking over the leadership of budget went too far.

“It can only be put in place by the Greeks, in a democratic way,” said Sarkozy.

Ever since Greece threw the eurozone into financial turmoil in 2009 when it admitted previous governments had played down the amount of debt, it has been criticized as a profligate nation living off the wealthy northern nations.

It has since committed itself, under often intense pressure, to slowly move back toward a degree of fiscal discipline.

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Total U.S. money market mutual fund assets fell $14.68 billion to $2.679 trillion for the week ended Wednesday, Investment Company Institute said.

Assets of the nation’s retail money market mutual funds fell $5.73 billion to $929.14 billion, the Washington-based mutual fund trade group said. Assets of taxable money market funds in the retail category fell $3.89 billion to $733.47 billion. Tax-exempt retail fund assets fell $1.84 billion to $195.67 billion.

Meanwhile, assets of institutional money market funds fell $8.95 billion to $1.750 trillion. Among institutional funds, taxable money market fund assets fell $8.13 billion to $1.653 trillion; assets of tax-exempt funds fell $820 million to $96.20 billion.

The seven-day average yield on money market mutual funds was 0.02 percent in the week ended Tuesday, unchanged from the previous week, said Money Fund Report. The 30-day average yield was also unchanged at 0 guaranteed online personal loans.02 percent.

The seven-day compounded yield was flat at 0.02 percent, as was the 30-day compounded yield at 0.02 percent, Money Fund Report said.

The average maturity of the portfolios held by money market mutual funds was unchanged from the previous week at 44 days.

Bankrate.com said its survey of 100 leading commercial banks, savings and loan associations and savings banks in the nation’s 10 largest markets showed the annual percentage yield available on money market accounts was unchanged at 0.13 percent from the previous week.

Bankrate.com said the annual percentage yield on six-month certificates of deposit was unchanged from the previous week at 0.22 percent.

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Greece is still hopeful that it will be able to reach a deal with private bondholders to cut its massive debt _ despite tougher terms set by its European partners.

On the front line of Europe’s sovereign debt crisis, Athens is trying to get its private creditors _ banks and other investment firms _ to swap their Greek government bonds for new ones with half their face value, thereby slicing some euro100 billion ($130 billion) off its debt. The new bonds would also push the repayment deadlines 20 to 30 years into the future.

However, the main stumbling block over the past few weeks to securing this deal has been the interest rate these new bonds would carry. A high interest rate could buffer losses for investors, but would also require the eurozone and the International Monetary Fund to put up more than the euro130 billion in rescue loans they promised in late October.

In the early hours of Tuesday, politicians representing the 17 countries that use the euro as their currency drew a firm line on the Greek debt restructuring.

Jean-Claude Juncker, the Luxembourg prime minister who chaired a meeting of finance ministers on efforts to fight the crisis, said the average interest rate over the lifetime of the new Greek bonds must “clearly below 4 percent,” with an average rate of less than 3.5 percent for the period until 2020 _ far below the 4 percent demanded by the Institute of International Finance, which has been leading the negotiations for the private bondholders.

The caps on the interest rates underline that the eurozone and the IMF are unwilling to increase new rescue loans above the promised euro130 billion, even though Greece’s economic situation has deteriorated. After already granting Greece a euro110 billion bailout in May 2010, the eurozone and the IMF are threatening to withhold further funding for the country, which has repeatedly failed to hit budget and reform targets required in return for the financial aid.

The interest rate caps will also seriously test the willingness of private bondholders to agree to a debt deal voluntarily. IIF head Charles Dallara over the weekend had characterized the bondholders’ most recent offer as the best possible.

Greek finance minister Evangelos Venizelos was nevertheless confident that the two sides could find common ground.

“We have the green light from the Eurogroup to close the deal with the private sector in the next few days,” Venizelos said in Brussels.

The alternative to a voluntary deal would be to force losses on to investors _ a move that the eurozone has so far been unwilling to make. Officials fear that a forced default could trigger panic on financial markets and hurt bigger countries like Italy, Spain or even France.

Dutch Finance Minister Jan Kees de Jager has said that a voluntary deal was not a must and that getting Greece’s debt down to a sustainable level was a bigger priority.

“Greece and the banks have to do more in order to reach a sustainable debt level,” he told reporters Tuesday as he arrived for a second day of meetings with his European counterparts. “We have to await the discussions about that because a sustainable debt level is absolutely a precondition for the next (rescue) program.”

Europe’s finance ministers are meeting in Brussels to discuss other elements of their efforts to fight the wider crisis _ including a permanent bailout fund for nations in financial distress and a balanced budget treaty.

Greek stocks opened lower Tuesday, shedding a collective 3 percent one day after optimism on the debt writedown deal sparked a 5 percent rally.

Meanwhile, updated budget execution figures released by the Greek Finance Ministry showed that despite massive spending cuts, the country’s fiscal deficit for 2011 was actually higher than in 2010.

Last year’s fiscal deficit hit euro21.72 billion ($28.27 billion) _ euro270 million ($350 million) more than in 2010.

Revenues were euro910 million ($1.18 billion) below target, but the ministry said this was offset by higher-than-anticipated spending cuts of euro896 million ($1.16 billion).

These figures are on a cash basis, and exclude some categories of spending taken into account in calculating the final budget deficit for 2011 _ which Greece has pledged to cut to about euro20 billion ($26 billion).

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Nicolas Paphitis in Athens, Greece, contributed to this story.

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GROOVY GROVE: One of St. Louis’ newest designated communities, the Grove, has started off the new year with several new business openings and planned openings of several more.

Urban Breath Yoga at 4237 Manchester Avenue opened on Jan. 1, which, yes, was intended to coincide with the need for a place for hangover recovery. Director Cathleen Williams said the studio was previously located in Dogtown, and that she made the new space the main location because it has a larger reception area and additional room for classes.

Located in the same block is No Coast Skateboards, which opened last year and bills itself as the only skater-owned and operated shop in St. Louis. Planning to open soon along the same stretch is the SoHo Restaurant and Lounge, which is described as an upscale restaurant with a rooftop deck for dining and lounging payday loan.

Sameem Afghan Restaurant, which had originally been on South Grand but closed for a couple of years, reopened last week at 4341 Manchester Avenue. Owner Fahime Mohammad also operates Al Waha Restaurant and Hookah Lounge at the old Sameem’s location. He also operates the Kabob Palace catering company in Manchester.

The addition of Afghan cuisine adds another dimension to the variety of international cuisine in the Grove, which also has restaurants offering Baja Mexican, Nepalese, soul food and Spanish tapas. Rounding it off will be O’Shay’s Irish Pub, which is planning a spring opening.

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U.S. employment likely grew solidly last month, but the jobless rate probably rose from a 2-1/2 year low as improving conditions lured some Americans who had given up looking for work back into the labor market.

The government’s closely watched employment report due on Friday should cement views that economic growth accelerated in the fourth quarter after a tepid performance in the first nine months of 2011.

However, the pace of job creation remains too slow to signal a robust recovery is finally under way. Nonfarm payrolls rose 150,000 last month, according to a Reuters survey, after rising 120,000 in November.

Unusually mild weather during the month may have given employment a boost.

While the unemployment rate is expected to edge up to 8.7 percent from 8.6 percent, the tone of the report will likely be strengthened by upward revisions to the payrolls count for October and November, in keeping with a recent trend.

“Businesses are beginning to feel a little bit better about the future and are hiring, but we cannot get too excited because 150,000 is the minimum we need to keep the job market stable,”

said Sung Won Sohn, an economics professor at California State University Channel Islands in Camarillo, California.

The economy would need even faster job growth over a sustained period to make a noticeable dent in the pool of 24.4 million Americans who remain either out of work or underemployed 2-1/2 years after the end of the 2007-09 recession.

Job growth has averaged 131,000 over the past 11 months and even if payrolls rise as expected in December, employment will still be 6.1 million below its December 2007 level.

With the labor market still far from healthy, the debt crisis in Europe unresolved and tensions over Iran threatening to drive up oil prices, the U.S. economy faces stiff headwinds.

Economists predict the recovery will lose a step early this year after expanding in the fourth quarter at what is expected to be the fastest pace in 1-1/2 years.

This should keep alive the possibility of the Federal Reserve embarking on a third round of asset purchases, or quantitative easing, to spur stronger growth.

“We could see QE3 by the middle of the year,” said Harm Bandholz, chief U.S. economist at UniCredit Research in New York.

The employment report will offer little comfort to the Obama administration and could provide Republicans with more ammunition to attack the government’s handling of the economy.

President Barack Obama’s chances of a second term in office could depend on the health of the labor market.

LABOR MARKET TONE IMPROVING

Although the pace of job creation remains mediocre, there is no denying that the market is healing.

Small business hiring is improving and layoffs have subsided, with first-time applications for state unemployment benefits hovering near 3-1/2 year lows.

Over the past several months, the government has consistently revised up earlier payroll counts based on its survey of employers high risk personal loans. In addition, the household survey, from which the unemployment rate is derived, has shown an even more vigorous pace of hiring for each of the last four months.

Economists say the Bureau of Labor Statistics may not be picking up jobs created by small companies and new businesses.

“The payrolls survey has a hard time picking up smaller employers and births of new start-ups, and that’s where we expect to see a lot of job creation,” said Stephen Bronars, senior economist at Welch Consulting in Washington.

“It’s always going to be harder for the BLS to pick up those because they are measuring employment at companies that are included in their survey and those tend to be the bigger, well established companies.”

In Friday’s report, the government will revise the household series going back five years. Analysts will watch this survey closely to see if the recent improvements will hold.

A broad measure of unemployment that includes people who want to work but have stopped looking and those working only part time but who want more work hit a 2-1/2-year low in November.

GOVERNMENT A DRAG

All the anticipated job gains in December will come from the private sector, where payrolls are seen rising 165,000. Government employment is expect to shrink 15,000, weighed down by budget cuts at state and local governments.

However, the worst of the belt tightening is over and some states have reporting increases in revenue.

In November, a measure of the share of industries that showed job gains during the month fell sharply and economists will be watching to see if it recovers.

Job gains in December are expected to come from construction, where unseasonably mild weather has boosted groundbreaking for new homes. Transportation and warehousing payrolls could also benefit from the mild temperatures.

Manufacturing could post a third consecutive month of job gains, but a moderation in retail employment is expected after recording the biggest increase in seven months in November as retailers geared up for a busy holiday shopping season.

Healthcare and social assistance hiring is expected to pick up after adding the smallest number of jobs in five months in November. Temporary hiring — seen as a harbinger of future hiring — is expected to show more gains.

Even though employment probably picked up last month, a modest gain in hourly earnings is likely, indicating that most of the jobs being created are low paying. The high unemployment rate also means wages cannot grow much.

This is a potentially troubling sign for consumer spending, which has been largely supported by a reduction in savings.

The average work week is seen steady at 34.3 hours.

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President Barack Obama will waste little time getting back in front of voters following a 10-day Hawaiian vacation spent largely out of the spotlight.

Air Force One was due to land in Washington on Tuesday morning after an overnight flight from the island of Oahu. The president is returning from vacation the same day Republican presidential candidates square off in the Iowa caucuses, the first nominating contest of the 2012 campaign.

Obama plans to make his presence in the campaign known quickly.

The president will host a live web chat with supporters in Iowa on Tuesday night as the caucuses are unfolding. The following day, Obama will travel to Cleveland for an event focused on the economy.

Obama aides said the president will seek to draw a contrast with his GOP challengers during Wednesday’s trip to Ohio, a state sure to figure prominently in the presidential campaign.

Obama returns to Washington facing further debate on extending payroll tax cuts, the same issue that consumed Washington during the final days of December.

Congress broke through a stalemate just days before Christmas, agreeing to extend the cuts for two months. Lawmakers will get back to work later this month to negotiate a full-year extension of the cuts, which Obama supports.

White House officials say the tax cut extension is the last “must-do” legislative item on Obama’s agenda this year. His strategy for his fourth year in office will focus largely on taking executive actions that do not need approval from lawmakers as he seeks to break away from a deeply unpopular Congress.

The payroll tax cut debate almost prevented Obama from taking his annual Christmas trip to Hawaii faxless pay day loans. He delayed the trip nearly a week, finally departing on Dec. 23, just hours after Congress finalized the two-month extension.

The president, wife Michelle and daughters Malia and Sasha stayed largely out of the public eye during their trip to Oahu, the island where Obama was born and mostly raised.

The Obamas stayed in a multimillion-dollar oceanfront rental on Kailua Beach, near Honolulu, and surrounded themselves with a close-knit group of family and friends. That included Obama’s sister, Maya Soetoro-Ng, who lives on Oahu, and several of the president’s childhood friends.

Obama’s outing consisted largely of trips to the gym and golf course at Marine Corps Base Hawaii near his vacation rental. The first family also made a few outings around the island, including a snorkeling trip to popular Hanauma Bay and a stop for shave ice, a Hawaiian snow cone.

The president also took his family to the East-West Center, a research and exhibition center that is displaying the anthropological work of his late mother.

Aides say Obama spent a bit of time on vacation brainstorming ideas for his Jan. 24 State of the Union address, where he will lay out an agenda that also will serve as the basis for his campaign message. He also was briefed by a small cadre of traveling advisers on some of the international issues looming in 2012, including renewed threats from Iran and a request from Yemen’s outgoing, autocratic president to come to the U.S. for medical treatment.

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The nameplate outside George Paz’s windlowless office, no bigger than any other at Express Scripts, carries his name, but no title.

The mustachioed chairman and chief executive eats in the company cafeteria, and parks his Audi sedan in an unreserved, lower-level spot. He knows a surprising number of his employees on a first-name basis, stopping occasionally to chat them up.

Even with Thursday’s announcement that Express Scripts plans to buy a leading rival, Medco Health Solutions, Paz eschews the spotlight

CALGARY

There will be no storybook ending for Borders. The 40-year-old book seller could start shuttering its 399 remaining stores as early as Friday.

The Ann Arbor, Mich.-based chain, which helped pioneer the big-box bookseller concept, is seeking court approval to sell off its assets after it failed to receive any bids that would keep it in business. The move adds Borders to the list of retailers that have failed to adapt to changing consumers’ shopping habits and survive the economic downturn, including Circuit City Stores Inc., Blockbuster and Linens `N Things.

On Thursday, Borders is expected to ask the U.S. Bankruptcy Court of the Southern District of New York at a scheduled hearing to allow it to be sold to liquidators led by Hilco Merchant Resources and Gordon Brothers Group. If the judge approves the move, liquidation sales could start as soon as Friday; the company could go out of business by the end of September.

Borders’ attempt to stay in business unraveled quickly last week, after a $215 million “white knight” bid by private-equity firm Najafi Cos. dissolved under objections from creditors and lenders. They argued the chain would be worth more if it liquidated immediately.

“We were all working hard toward a different outcome, but the headwinds we have been facing for quite some time, including the rapidly changing book industry, e-reader revolution, and turbulent economy, have brought us to where we are now,” said Borders Group President Mike Edwards in a statement.

Borders liquidation could have far-reaching effects, putting thousands of people out of work at a time of high unemployment, particularly in Michigan where Borders is based. The chain, which has been shrinking in recent years, currently has 10,700 employees.

“We’ll want to look closely from the jobs perspective of people in the state,” said Geralyn Lasher, spokeswoman for Gov. Rick Snyder, in a statement.

The loss of Borders stores will deal a blow to malls nationwide, according to real estate sources. Borders stores average about 25,000 square feet __ about half the size of a football field __ and a liquidation could leave large empty spaces across the country.

Borders’ move to close 228 stores while it reorganized in bankruptcy protection already increased the collective vacancy rate of shopping centers that contained a Borders to 9.3 percent from 4.2 percent, estimated Chris Macke, senior real estate strategist at CoStar Group, the nation’s largest provider of real estate data. Macke calculated the liquidation of the rest of the chain could increase the vacancy rate on that same basis to 18.8 percent.

Additionally, Simba Information senior trade analyst Michael Norris predicts the closing could cause sales of electronic books to fall. Borders, for one, entered the electronic book market with Canada’s Kobo Inc. last year. Owners of the Kobo e-reader will still be able use Kobo software to buy and read books. And Kobo officials said users of Borders e-book accounts, which began transitioning to Kobo in June, will be able to access their e-books uninterrupted.

“This industry is going to slowly figure out that a lot of e-book readers still use bookstores all the time to discover what’s new before heading home to buy it for their e-reading device,” he said.

Perhaps a Borders liquidation would hurt the consumer most. Tanya Ellis, 42, of Southfield, Mich., said the closings are “horrible.” She said she and a friend would stop at a nearby Starbucks, then visit the Borders store in Beverly Hills, Mich., and browse for about an hour.

“So where are we going to buy books from? I just got into reading books the last two or three years, and they just keep closing all these bookstores,” she said, adding that electronic readers aren’t an option for her. “It takes all the fun out of it.”

Justin Grant, 31, from Brooklyn, however, was less phased. Although he had just picked up a parenting book to read on his commute home Monday, he said he buys most of the 25 to 30 books he reads a year on Amazon.

“It’s much easier to get them through the mail and delivered to my desk at work,” he said.

It has been a long fall for Borders since Tom and Louis Borders opened their first store in 1971, selling used books in Ann Arbor. At its start, the brothers were mostly interested in offering other bookstores a system they developed for managing inventory.

But in 1973, the store moved to a larger location and shifted its focus to selling new books and expanding, helping pioneer the big-box bookstore concept along with Barnes & Noble Inc. At the time, Waldenbooks and B. Dalton mall chains, with small stores and 20,000 to 50,000 titles, were growing rapidly. The new superstores, by contrast, offered between 100,000 and 200,000 titles, as well as enticements to linger like comfortable chairs and attractive lighting.

Kmart Corp. saw the potential and acquired Borders in 1992, forming a book unit with Waldenbooks. It then spun the bookstores off as a separate company in 1995, the same year Amazon started selling books online.

Borders was slow to adapt to the changing industry and lost book, music and video sales to the Internet and other competition. Sales began to fall, leading to a revolving door of CEOs. By the time Borders’ current CEO, financier Bennett LeBow, came aboard in May 2010 after investing $25 million in the company, bankruptcy was already looking like a strong possibility.

Borders filed for bankruptcy protection in February after being hurt by tough competition from online booksellers and discounters. It hoped to successfully emerge from bankruptcy protection by the fall as a smaller and more profitable company, but pressure from creditors and lenders eventually led the chain to put itself up for sale and finally, seek approval to liquidate.

At its peak, in 2003, Borders operated 1,249 Borders and Waldenbooks, but by the time it filed for bankruptcy protection in February that had fallen to 642 stores and 19,500 employees. Since then, Borders has shuttered more stores and laid off thousands.

Borders says it expects to be able to pay vendors for all expenses incurred during the bankruptcy cases.

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