The Borders Group said Monday that it would liquidate, shutting down the 40-year-old bookseller after it failed to find a last-minute savior.

Though it is not a big surprise, the move will still strip the publishing industry of shelf space that is growing increasingly scarce as brick-and-mortar stores continue to founder.

Borders said it would proceed with a proposal by the private equity firms Hilco and Gordon Brothers Group to close its 399 remaining stores. That liquidation plan will be presented Thursday to the federal judge overseeing the company's bankruptcy case.

The company will begin closing its remaining stores as soon as Friday, and the liquidation is expected to run through September. The chain has 10,700 employees.

There are six Borders stores in the Houston area: on Kirby Drive, the Galleria, Meyerland Plaza, Bush Intercontinental Airport, Baybrook Mall and The Woodlands.

Borders' fate appeared sealed after a committee of its biggest unsecured creditors rejected the company's plan to sell itself to Najafi Cos. for $215.1 million. The committee had argued that the bid by Najafi, which also owns the Book-of-the-Month Club, could have allowed the investment firm to liquidate Borders without the creditors benefiting.

Borders had set Sunday as a deadline to find alternatives to liquidation. But while it had held talks with Books-A-Million and other companies, it was unable to sign up another deal.

The company, which began in 1971 as a used bookstore in Ann Arbor, Mich., fought to stay afloat for years amid a tough retail environment, persistent management turnover and a failure to move aggressively into digital books. In February, it filed for bankruptcy protection and closed about a third of its 650 stores.

After the bookseller declared bankruptcy in February, many publishers pressed for reorganization, but they were left unconvinced that executives had a workable way to revamp the company.

More for you Business Borders chain plans to liquidate

The news exposed a deep fear among publishers that bookstores would go the way of the record store, leaving potential customers without the chance to stumble upon books and make impulse purchases. Publishers have worried that without a specific place to browse for books, consumers could turn to one of the many other forms of entertainment available and leave books behind.

Publishers said that with Borders gone, they would plan for smaller print runs and shipments. Employees at major publishing houses worried about layoffs because many companies have staff members who work only with Borders.