If you believed that Borders Group (NYSE:BGP) could be the next Circuit City, your theory just got a whole new pile of ammunition. In a word, Borders' holiday sales stunk.

The company released sales data for the 11 weeks ending Jan. 16. Total sales fell 13.7%, to $846.8 million. Same-store sales at Borders superstores fell 14.6%. The way the company phrased its press announcement about its Waldenbooks unit was rather telling; comps for Waldenbooks stores that will remain open beyond the end of this month fell 9.4%. These are necessary closures, of course, but they still illustrate the company's sad state of affairs.

Borders' situation is growing increasingly dire. a promotional holiday environment that was difficult for many retailers forced the bookstore giant to reduce its promotions. While that did increase its gross margin, we can clearly see that it also hurt Borders' customer traffic. In a season when Wal-Mart Stores (NYSE:WMT) made Christmas discounts a competitive sport, Borders could not afford to slow down on promotions.

On a big-picture level, the competitive landscape is very difficult for Borders, which faces serious rivals in Amazon.com (NASDAQ:AMZN) and Barnes & Noble (NYSE:BKS). The nascent e-book market worsens the situation; Amazon's Kindle has been a popular device, and Barnes & Noble has a solid enough financial position to try for a piece of that action by bringing the Nook e-reader to market. Don't forget that Apple's (NASDAQ:AAPL) new tablet device looms on the horizon as well.

As far as I can tell, Borders has its hands full simply trying to survive, let alone orchestrate a competitive counterattack.

With Borders shares trading at a buck and change, perhaps many speculative investors have bought in, thinking that a stock selling for less than the price of a venti beverage at Starbucks (NASDAQ:SBUX) is "cheap." Hopefully, they're fully aware that theirs is an incredibly risky gamble.

Borders' business has been eroding for ages. It hasn't reported an annual profit since the year ended Jan. 28, 2006. Its revenue continues to fall at a pretty significant clip. It can't cut costs forever, customer traffic is still flagging, the competitive landscape is full of powerful contenders, and the e-book revolution is poised to disrupt its entire industry.

If Borders can't do better than this during the biggest shopping period of the year, how will it fare in the rest of 2010? Not very well, I fear.

What do you think? Can Borders survive, maybe even thrive? Are bears like me too pessimistic about the bookseller? Or do you think 2010 will be the year on Borders' epitaph? Let us know in the comments boxes below.

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Alyce Lomax owns shares of Starbucks. The Fool has a disclosure policy.