Embattled US book chain Borders is set to be liquidated after it failed to attract any buyers for the business.

Last week talks with private equity investor Jahm Najafi to buy the company fell through, stripping the chain of its last chance of a buyer.

It is now expected that the US arms of Hilco and Gordon Brothers will begin liquidating the chain as early as Friday. Borders, which once operated 1,000 stores within the US, now has 399 stores and employs 10,700 people.

Borders director Mike Edwards is said to be “saddened” by the outcome, and blamed the rapid rise of e-books and e-readers - such as Amazon’s Kindle - in the “rapidly changing book industry”.

It is thought that the decline of the retailer, which was the second largest book chain in the US, could accelerate the demise of paperback and hardcover books.

Borders UK, which split from its US parent in 2007, hit the buffers in 2009.