Milpitas Borders Now on the Chopping Block

Update: Borders' official last day is May 31.

It may have looked like the Milpitas had escaped the chopping block—but alas, Borders Group released an updated store closure list on Thursday with an additional 28 stores, including the Milpitas location.

All of this comes in the wake of Borders Group's recent Chapter 11 filing and subsequent bankruptcy reorganization, announced in February.

According to the list released by Borders Group on Thursday, the McCarthy Ranch store will close by the end of May.

"I'm so sad. I love coming here," Milpitas resident Tanya Morris, who frequents the McCarthy Ranch store, said when she heard the news Friday morning.

According to Borders spokeswoman Rosalind Thompson, when the company filed for Chapter 11 bankruptcy in February, it struck a deal with liquidators that an initial group of 200 stores would be selected for closure, with the option to close another 75 at a later date if it were deemed necessary.

The first group of 200 stores was announced immediately and included such Bay Area locations as Santana Row and Westfield Shopping Center, both in San Jose. Those two stores are scheduled to close by the end of April. The additional list of 28 store closures announced on Thursday included Milpitas and San Ramon, which will close by the end of May.

Thompson says the biggest factor contributing to the closure of the additional 28 stores is high rent.

"It all comes down to the economics of the stores, such as rent and other expenses," Thompson said Friday.

Thompson said efforts were made to negotiate cheaper rents for the 28 stores on the chopping block, in a last attempt to save them from closure—and that, as of Friday morning, two out of the 28 stores were taken off the closure list after the property managers who own the store spaces came back to the table with better deals on rent.

The McCarthy Ranch store was not one of them.

"We were unable to come to a new agreement with that landlord [of the Milpitas store]," Thompson explained.

The McCarthy Ranch Shopping Center is owned by a Florida pension fund in partnership with L&B Realty Advisors, which has its headquarters in Dallas.

"It certainly saddens me that a business is leaving Milpitas," Carol Kassab, CEO of the Milpitas Chamber of Commerce, said on Friday. Kassab said she hopes all of the store's employees will be able to find other jobs.

With so many Bay Area Borders locations closing, it appears the store at the intersection of Mathilda Avenue and El Camino Real in Sunnyvale will be the only South Bay location left.

"I'm disappointed the Milpitas Borders will be closing. It's the closest one to my house," said Tom Redmond of San Jose, a frequent customer. "I'm not sure I want to drive all the way to Sunnyvale to get to another Borders."

Employees at the Milpitas store say clearance sales will likely be starting soon, but that dates and discounts have not yet been determined.