Jason Roy, the general manager of the 900 State St. location, told the Business Times on Nov. 16 that the store would be closing in January.
“It’s sad that this Borders is leaving State Street,” said Roy, who’s been with the company for nine years, the past three months at the Santa Barbara location.
The store has about 35 employees, he said.
Although he wasn’t sure of the reasons behind the store’s closing, Roy said it is likely connected to an overall slowdown in the retail sector.
“In general if you walk State Street all the businesses are slow,” he said. “Walking it last night it was dead. I think it has to do with the economic times.”
The second-largest bookstore chain in the country behind Barnes & Noble, Borders has seen declining sales and profit margins for the past several years. The book retailer widened its losses to $46.7 million in the second quarter of the year as its second-quarter revenues dropped 6.8 percent.
The Michigan-based company has cut its store count by almost half in the past three years as it shutters underperforming U.S. locations and sells off international operations, Bloomberg News reported.
The building housing Borders’ Santa Barbara location was purchased in April by an affiliate of Santa Barbara-based real estate investment firm SIMA Corp. for $10 million, at the time the largest commercial real estate deal in downtown Santa Barbara in more than two years.
Borders has a long-term lease on the 38,000-square-foot, three-story building, but has notified the landlord that it has found another tenant to take the lease over, SIMA President Kevin Burnes told the Business Times on Nov. 16.
“We’re still very comfortable with our investment,” he said.
He would not say who the new tenant is. Roy said he doesn’t know who’s moving in to replace the bookstore, and Borders’ corporate media office did not immediately return a call seeking comment.