U.S. bookstore giant Borders Group Inc., filed for bankruptcy on Wednesday as its sales plunged in the face of competition from online bookstores, the company said in a statement.

The number-two U.S. bookstore chain will close about 30 percent of underperforming stores in the next several weeks and restructure with 505 million U.S. dollar in so-called debtor-in- possession financing from lenders led by GE Capital, the statement said.

In its Chapter 11 petition filed in U.S. Bankruptcy Court, Borders Group listed debt of 1.29 billion dollar and assets of 1. 28 billion dollars as of December 25, 2010.

"Borders Group does not have the capital resources it needs to be a viable competitor, " the company's president Mike Edwards said. "The filing will give it time to reorganize in order to reposition itself to be a successful business for the long term."

With the launch of online books and electronic readers, consumers have less and less interest in traditional bookstores, however, Borders Group does not catch up with the pace of digital era. Borders Group sold e-commerce division to Amazon in April, 2001, and the latter finally grow up to be the world's largest online book retailer. In the face of competition from Amazon and other online bookstores, Borders' market value shrank by more than 3 billion dollar since 1998.