Borders UK goes down the back of the sofa

Has the internet just claimed its first big retail victim in Britain? It looks like it. The book store chain Borders, which came here from the States 12 years ago, has collapsed into administration and the 45 stores - which include the Books etc outlets - are likely to be broken up.

When it was first announced that Borders was coming to London, anyone who had been on holiday in the US and "seen the future " - young people lounging around on soggy sofas, sipping lattes while they idly leafed through a book before deciding whether to buy - was telling their friends how great it was going to be.

The super-friendly stores, which started in the university town of Ann Arbor, Michigan in 1971, would have us all quitting Waterstone's and certainly WH Smith.

It might have worked had Borders UK stuck to the high street. Instead they made the fatal decision of settling in edge-of-town shopping malls where mums pushing babies might like to shop for food and clothes but educated singles and young couples don't want to spend the afternoon flicking through books.

As for the audience for Katie Price's latest novel or a Twilight paperback then you don't need Borders or indeed any book shop, you need Tesco where it will be bargain-priced or, of course, Amazon. One in five books in Britain is now sold on the internet.

"Borders has the whiff of the Friends generation about it," Neill Denny, editor-in-chief of the Bookseller, told the Guardian. "It was very of its time and all set up to sell cultural stuff like books, CDs and DVDs to hip young things. But the market changed around it ­ in the end the 'Friends' left New York and moved to suburbs and were in fact the generation that was first to start shopping online."

The Borders UK chain no longer has any links with its American parent. Already in trouble, it was sold in September 2007 to Risk Capital Partners, the private equity company run by outgoing Channel 4 chairman Luke Johnson, and earlier this year changed hands again in a management buy-out.

Despite much belt-tightening and some store closures during this period, the writing was on the wall. When WH Smith pulled out of a tentative deal to buy up half the stores last week, it was all over.

Across the Atlantic, the original Borders is still in business but having a hard time - partly, say analysts, because it has not developed its own electronic reader to rival Amazon's Kindle or Barnes & Noble's Nook. Earlier this week shares fell 13 per cent after Borders posted a larger than expected loss. ·