Following on its “don’t worry, it’s business as usual as we search for a buyer” notice on its website, Borders Group, a pioneer in big-box booksellers, posted a sad notice on another section of its website confirming an unhappy ending to its story.
A press release yesterday confirms that it will close all stores and be out of business by the end of September. Unable to attract a buyer willing to rescue it from bankruptcy, the nation’s second-largest bookseller, with 10,700 employees and more than 1,200 stores, is ending its run.[more]
“Following the best efforts of all parties, we are saddened by this development,” stated Borders Group president Mike Edwards. “We were all working hard towards a different outcome, but the headwinds we have been facing for quite some time, including the rapidly changing book industry, eReader revolution, and turbulent economy, have brought us to where we are now.”
“For decades, Borders stores have been destinations within our communities, places where people have sought knowledge, entertainment, and enlightenment and connected with others who share their passion,” Edwards continued.
“Everyone at Borders has helped millions of people discover new books, music, and movies, and we all take pride in the role Borders has played in our customers’ lives. I extend a heartfelt thanks to all of our dedicated employees and our loyal customers.”
Subject to the Court’s approval, under the proposal, liquidation is expected to commence for some stores and facilities as soon as Friday, July 22, with a phased rollout of the program which is expected to conclude by the end of September. Borders intends to liquidate under Chapter 11 of the Bankruptcy Code and, as a result, Borders expects to be able to pay vendors in the ordinary course for all expenses incurred during the bankruptcy cases.
All of which is to say, the Borders brand will be no more as the company undertakes the painful process of winding down its 399 stores, and letting go of its approximately 10,700 employees and countless authors, vendors and others who depend on its for a livelihood and cultural sustenance.
Borders Group Inc., based in Ann Arbor, Mich., opened a single store in 1971, operated by Tom and Louis Borders. Acquired by Kmart in 1992, it became part of a book unit with Waldenbooks, and was spun off in 1995 — the fateful year that Amazon began selling books online. Borders Online launched in 1998, and launched its e-bookstore in July 2010 — “eight months after Barnes & Noble does,” as Reuters notes.
Slow to adapt to a quickly changing industry, Borders lost key revenue from sales of books, music and video to online, discounted competition and despite a series of chief executive officers, resulting in the current tenure of Bennett LeBow, who joined in May 2010, having invested $25 million in the company (and last year, launching a Hail Mary pass with the Kobo e-reader (which isn’t affected, by the way) to take on Amazon’s Kindle — not to mention the iPad and Google’s e-reader foray), the march towards bankruptcy could not be reversed.
Border’s closing is seen by many as a “sad day in book publishing’s history [that] will do severe and lasting damage to the industry’s ecosystem,” says Simba Information senior trade analyst Michael Norris.
“It saddens me tremendously because it was a wonderful chain of bookstores that sold our books very well. It’s part of the whole change that we’re dealing with, which is very confusing,” commented Morgan Entrekin, president and publisher of Grove/Atlantic, to the New York Times.
Random House joined the Twitter chorus showing support for Borders employees with the hashtag #ThankUBorders, and posted this tweet:
When Borders first filed for bankruptcy protection in February, they owed $272 million to 30 unsecured creditors including Penguin Group USA, Hachette Book Group, Simon & Schuster, Random House, HarperCollins and Macmillan.
An essay posted on Quora by Mark Evans, former Director of Merchandise Planning & Analysis at Borders, highlights key bad decisions that led to Border’s demise:
• Failure to properly invest in and develop an internal internet sales channel
• Bad leases (too expensive per square foot)
• Borders had a large compact disc business
• Over-investment in inventory
• Inefficient supply chain systems
• Poor branding strategy (B&N got Starbucks!)
Ironically, the chain’s demise is a boon for smaller, independent bookstores that eschewed the online evolution and catered to those local customers who wanted the bookstore experience – and not just the mouse click of a purchase.
“Now we have this behemoth off our backs. It’s not the politic answer to say that inside, there’s a little happy bookseller who’s jumping up and down,” said Linda Bubon in the NYT, an owner of Women and Children First, a 31-year-old bookstore in Chicago.
But in some cities, like Birmingham, Borders closing leaves no major bookstores; the only place in town to buy books now is the Christian Science Reading Room on Maple Road.
The Birmingham store was a popular destination for traveling authors including literary heavyweights Brad Meltzer and Elmore Leonard, and this week’s guests, former Birmingham resident-turned-writer Susan Whitall and Grosse Pointe native Megan Abbott.
The rise of all things ‘e,’ books and readers, has ultimately brought the demise of a now seemingly old-school box chain, Borders, as the iconic and ironic cry, You’ve Got Mail, that became an anthem for the seachange to come, was still just a funny tech catchphrase (back when AOL and email was the harbinger of doom for a different printed matter purveyor: mail) in a movie.
Now, in the 2011 remake starring Borders, you might call it, You’ve Got Fail.