Flash! Borders files for bankruptcy

Flash! Borders files for bankruptcy

This seemed inevitable, and I’ve written about Borders financial problems before.

It’s official: Borders filed for Chapter 11 bankruptcy.

BordersReorganization.com 

Borders Press Release

Reuters article via Yahoo

That doesn’t mean the second-largest brick-and-mortar bookstore chain in the US is out of business.

However, they will shut down about 200 stores (roughly a third of them). 

Store Closure List

The closings will start Saturday.

They have said they will honor gift cards.  When Borders have closed around my area before, they did a clearance on books…that may happen again. 

What does this mean?

First, it’s sad for me to see bookstores close…but I’m always wary of the construction that one company or trend caused another one to go out of business.  Did Borders cause Mom and Pop stores to close?  No, customers did (and rising rents, in some cases).   The customers chose size, convenience, and price over service.  It wasn’t Borders closing those little stores…it was customers making a new choice.

Similarly, e-books didn’t cause the bankruptcy of Borders.  It was Borders inability to adapt quickly enough to the trend, at least partly.  They may kick themselves that they didn’t choose to go with a Borders branded EBR (E-Book Reader)…but that wasn’t the only issue with that chain.

The malls will obviously be hurt by this.  A Borders is a big store…what new chain can fill it?  It’s too big for a Toys R Us Express…and the Spirit Halloween stores won’t be around until September or so.  You might see some gyms go into those places, that seems to be growing.

It should give some boost to Barnes & Noble.  However, I don’t see them rushing to fill those cavernous stores.  It will probably also help Amazon…this will push some people into getting EBRs who might not have done so otherwise.   Of course, Barnes & Noble may get a disproportionate share of the increase.  Say you were only used to shopping in bookstores.  Your Borders closes, so you go into a Barnes & Noble (which isn’t as convenient for you).  While you are there, a clerk points out to you that you could use a NOOK, and not have to come back into the store.  That might be attractive.

Hopefully, Barnes & Noble (and Amazon) doesn’t write a letter to general customers like B&N just did to Associates!  =:o 

Kobo, Sony, and Velocity all had EBRs for sale in Borders stores…they’ll be hurt by this. 

I guess it might be a boon to Starbucks…lots of people used Borders just as a place to get free wi-fi and a latte. 

Authors and publishers will definitely be hurt initially. 

For now, the online e-book business should continue and your library there should be safe.  However, that may not be true in the long run.  Bankruptcy means you don’t have to pay some of your debts…it doesn’t magically mean you will be a success again.  I could certainly see that e-book business being sold to somebody else.  Not necessarily Barnes & Noble or Amazon…but there may be other companies (TimeWarner?) that see that as an attractive segment.

Is it the end of an era?

Sort of…Barnes & Noble will still have their big generic bookstore chain.  Borders has only been around since 1971: is forty years an era?  They certainly didn’t start out as a chain, either. 

Will we see news coverage of the closures treating this as the end of Western Civilization?  Or will it just be a shrug and an “oh, well”?

Feel free to let me know what you think.  I’ve had some very good experiences in Borders stores.  I’m a former bookstore manager (not a Borders, though).  This doesn’t come as a surprise, but I can’t helping feeling a bit nostalgically melancholic.  In the long run, I think it’s better for publishing…it opens up the distribution channels.  Still, I’ll miss walking those aisles…

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

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3 Responses to “Flash! Borders files for bankruptcy”

  1. karin Says:

    I have memberships at both Borders and Barnes and Noble. I just received an email from Borders that they are closing the store at the King of Prussia Mall in PA. I called Borders to see if they had a book that I could not find on the Kindle site. I talked with the salesperson there, and let them know how sorry I was that the store was closing.

    Here is the interesting thing: Borders was the only store that sold books, CDs or DVDs in the whole mall, and King of Prussia is the largest mall east of the Mississippi. According to the salesperson, the mall owners were not interested in negotiating the rent with Borders. Because I worked at the mall for years (at an independent bookstore), I know how expensive the rent is there.

    • bufocalvin Says:

      Thanks for writing, karin!

      At this point, it is the larger stores that are closing. That’s bad public image wise for Borders, but it makes sense. While nine stores in Pennsylvania are closing, I think that leaves thirty-two open in that state.

      The same kind of high-profile closures are happening in my area.

      If I was a mall owner, I would be wary of negotiating the rent for Borders…which hasn’t been able to pay the publlishers recently. Having a big hole is bad for the mall…but not getting paid is worse.

      Of course, the irony is there…it’s great that you worked in an independent bookstore: was it impacted by Borders being in the same mall?

      CDs and DVDs…I believe my local Borders has fewer than 20 CD titles now….not sure they even carry DVDs any more. They did away with the big section they had for that a while back.

      While people appear to be consuming more media, they aren’t doing it as much by owning hunks of plastic or wood..

  2. karin Says:

    The bookstore might have been impacted by Borders and Barnes and Noble, which both moved in the area (B&N is in not in a mall) around the same time. I think the real reason the bookstore was closed was because the owner wanted to retire. I have seen other independent book stores close because of the larger stores, we had a few Children’s bookstores close and discount chain close. I was definitely attracted by Borders when they first opened. I went there every week.

    I agree with the smaller inventory of CDs and DVDs in Borders. It had been getting smaller and smaller in the last couple of years. I personally haven’t bought a CD in ages, I always buy from iTunes.

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