Borders files for bankruptcy, will close 194 stores

[mahatmakanejeeves]

Source: Detroit Free Press

Borders Group Inc. filed for Chapter 11 bankruptcy protection this morning after five years of turnaround efforts failed to return the Ann Arbor-based bookseller to health.

The nation’s second-largest bookseller said it would close 30% of its stores, or about 194 in the coming weeks, the company said in a statement.

It received $505 million in debtor in possession financing lead by GE Capital.

Borders ended its bankruptcy avoidance effort with round-the-clock efforts to work out survival deals with lenders and vendors.

Read more: http://www.freep.com/article/20110216/BUSINESS06/110216008/1019/business06/Borders-files-bankruptcy-will-close-194-stores

[Ozymanithrax]

1. I wonder which of the San Diego Stores will close... n/t

[LiberalEsto]

2. Noooooooooooooo

:cry: :cry: :cry:

[Sherman A1]

3. Truly Sad

It is a shame for so many reasons, particularly the loss of jobs.

[bluestateguy]

4. They never adapted their outdated business model in the way that B&N did

and their DVD's are too damn expensive too.

[Roland99]

5. I always preferred B&N over Borders

Preferred an old locally-owned chain back in Ky but they couldn't last in the face of the new megastores.

[Dappleganger]

8. Same here, I'm a dedicated B&N gal...

although my favorite place is still the used book store, Chamblain's across the river.

B&N stays quite busy in our area, thankfully.

[CBHagman]

10. In other words, because of B&N...

...there are fewer and fewer locally owned stores.

[Roland99]

11. Not like I'm going to stop buying books with the demise of locally owned retailers.

Borders and Books a Million just felt overly corporate. The B&N I used to frequent a lot didn't have that feel. *shrug*

[AtheistCrusader]

18. Hell, B&N seems to be just hanging on in the face of Amazon and others.

Real pitched battle there. I'm sort of torn, Amazon is local to me, and that means local jobs, but B&N has a brick and mortar bookstore, which I am partial to, and a reader (the Nook) that I prefer to the Kindle.

I don't really see how B&N is responsible for the continued existence of other bookstores.

[sledgehammer]

6. Can you elaborate a bit...

I'm interested in knowing where Borders failed compared to B&N.

Thanks!

[OnyxCollie]

12. A decade ago,

when stores were working on creating an Internet presence, Borders was screwing around with kiosks that would allow people to buy tracks and burn them onto a CD.

This was an attempt to try to get customers to come into the stores, buy coffee, and leaves books and magazines on tables, chairs, the floor, etc.

Then iTunes opened up and shot that straight to hell.

Of course, Borders' prices were too expensive, and even the employees (of which I was one) would find a better selection cheaper at Amazon and Half.com.

The DVD selection was pretty extensive, and I remember a customer asking if the DVD's were available to rent. (See: Netflix)

[sledgehammer]

13. Thanks!

It's unfortunate. I like the store a lot. Hope the one near me doesn't close. I doubt it, it's pretty busy all the time.

Hard times for the industry in general. Bookstores could go the way of Blockbuster with the rise of eBooks. They have to adapt, and it's going to be difficult.

[sweetloukillbot]

24. I worked at Borders from 96-02

First three years I was there it was the best job I've ever had - they treated employees well, offered great discounts on merch, gave us store credit accounts (which the company paid $30 a month towards), had great benefits, stock options (which I made a lot of money for a starving college student with for a couple years). The employees who got in around 94 did even better w/ the stock as well - it split a couple times in the mid 90s. The staff was mostly retired teachers, liberal arts college students, local musicians, artists, people who knew the products we sold and were enthusiastic about them. I worked the fiction section and knew every book I had in that dept. The store had some level of autonomy in ordering - and when I moved to the music and video dept we made sure we had the best selection of CDs and DVDs in town. We had in store performances from the likes of Bruce Hornsby and Yo Yo Ma. My particular store crushed the Barnes and Noble that had opened a couple years earlier, simply by opening an hour earlier and staying open an hour later. All of the employees except seasonals were full time, and most of the seasonals were kept on after the holidays. All the staff was promoted from within.
In 99 it started changing though. The company made the decision not to compete online - the thinking I heard was that Amazon was not profitable and could never be profitable, so why bother competing with them. The real money would be made by expanding overseas. So the company ignored the Internet and sunk money into big box stores in London and Edinburgh. Then they became convinced that people would not drive to Borders to shop - they needed to move closer to the customers. So we went from having 3 stores in Phoenix to having 13 - and they seriously considered opening another location less than 5 miles from my store - just so B&N wouldn't get the spot. By 2000 the benefits started shrinking - first to go were the stock options, but that didn't matter too much because the stock had started cratering after the dot com bust. Then the credit account went away. Then the full-timers lost their set schedules and hires were part time only. Those early and late hours that were attracting customers from B&N disappeared. Unique displays were gone, all the stores started looking the same. In stores became few and far between, the store stopped paying the local musicians who performed on Fridays and Saturdays.
In 2001 they restructured the company, demoting all of the Assistant managers. I was running the back office by this point and actually got a promotion out of it, but I was the only one in the store. All the people who I had opened the store with and gotten promoted with started dropping over the restructuring. I hung on for another year and a half, but by that point I had graduated and was starting to work in the newspaper biz - once I got a full-time position I bailed as well.
It really was a shame, because for a big box company, they treated it like a local hangout and in its heyday from 94-98 Borders was a great place to shop and work.
Incidentally, my store is the only one in Phoenix to survive. And we weren't even the nicest one in town.

[OnyxCollie]

31. Your experience was the same as mine.

I worked there from 1999 to 2005.

[sofa king]

25. Ah, the bookstore job.

From my point of view, fifteen or more years ago now, Borders was the cats pajamas compared to my evil, dysfunctional Haft-empire bookstore (Crown). By comparison our store was filthy, understaffed, disorganized and demanding of skills so far beyond that of its minimum wage pay that only lunatics like me would work for them.

The job had all the labor and knowledge requirements of a library job with none of the rewards or pay, plus all the labor and knowledge requirements of cashier and customer service representatives, with none of the rewards or pay, plus all the requirements of a security guard, postal worker, social worker, psychologist, and janitor--without the pay. In the meantime our greedy and evil overlords fought one another over all the money we were making for them.

Our one perk was the totally illegal, corporate approved process of ripping the covers off of mass-market paperbacks, keeping the books, and sending the covers to the vendor for reimbursement.

[OnyxCollie]

32. Your store kept the paperbacks?

We did the same thing at Borders, but we dumpstered the paperbacks.

Supposedly it was cheaper to throw them away than send them back.

[sofa king]

33. Yeah, seriously.

We were allowed to "strip" one book a week and take it home, which of course goes completely against the legal notice in the front matter... hold on here, let me find my copy of Shirer, which I still have courtesy of Crown...

...It may have been reported to the publisher as "unsold or destroyed" and neither the author nor the publisher may have received payment for it.

The covers were sent to the publisher just as if they'd been stripped and dumpstered. And naturally, when it came time for the bi-monthly inventory purge, we'd all search the records for any favorites of ours that might have been on the shelves for more than a few months, strip them first (and steal them), and then start hunting down the old lady-porn and tossing it in the trash. Maybe the chain got away with it by using the "unsold" angle, but what it really was was a way to pass the expense of this sole employee benefit onto someone else.

Oftentimes someone would "strip" a book that was required to be kept in stock, and the automatic ordering system would then send a new one a couple weeks later. I must have received a hundred copies of the Lord of the Rings, and sold maybe a quarter of them.

By the way, did you know Hitler was into S&M? Page 186 of Rise and Fall of the Third Reich, courtesy of the Hafts.

Edit: But to be clear, no, they never sold the coverless books. They just handed them out in lieu of money to their employees, and made the publisher pay for it.

[sweetloukillbot]

34. When I started they used to allow staff to take any stripped titles

We didn't really abuse the privilege and it was only the titles on the pull list that were stripped, but for the first year or so we were allowed to take stripped titles.
Some people were abusing it, and we had dumpster divers stealing them as well, so they started require that after the pulls were stripped, they had to be split in two to keep people from taking them.
Always loved the listening station changing days though!

[RainDog]

15. one industry reports states Borders failed

because they gave Amazon access to their customer db and Amazon used this to target Borders customers.

others claim they were too late into the e-book biz and too late with an online presence.

Amazon now engages in practices that caused Borders, B&N, Target and WalMart to lose a class-action suit filed by the American Booksellers Asso. (Part of the settlement stated that the ABA could not disclose all of the practices they engaged in to drive locally-owned and operated smaller stores out of biz.)

At this time Amazon threatens publishers and removes EVERY title of theirs from search engines if the publishers don't give Amazon preferential discounts that are not available to indies. They are now pushing e-books/kindle to own that market - but apple is pushing back, telling Amazon they have to pay them a fee for books that are used with the ipad,, etc...

(The Boston Review and The Nation wrote about this - the BR article is also available via Alternet.)

these folks aren't about getting people to read - they're about driving out competition - and, frankly, we'll be a sorrier world w/o physical books, esp. for children and the poor.

There is and still will be a market for physical books b/c some people prefer that format - but used books will become a bigger share of the physical book market over time b/c fewer physical books will likely be published - books that are physical books because of their importance as an "object" that cannot exist in e-book format... things that are beyond content, like bindings, paper engineering, etc. will be a bigger share of that market.

[OnyxCollie]

17. The Borders website (when it was finally created)

was just a portal to Amazon.

[sweetloukillbot]

35. I think they tried to do their own online vendor very early.

Didn't work, and it morphed into the inventory search site. I remember when they announced the partnership w/ Amazon - my jaw dropped because of how much corporate badmouthed the Amazon business model in 97 and 98...

[BlueIris]

23. Thanks for that summary. nt

[CBHagman]

29. Thanks for the background...

I wasn't aware of all the details of the Amazon tactics (I'd only heard about the pricing), but I'm a veteran of independent book/music shops and it almost hurts to see how things have changed. The loss of face-to-face contact, the locals, the regulars, all of that just breaks my heart.

By the way, another major issue for B&N, and likely for Borders, is the vast amount of shoplifting. Retail isn't all that profitable to begin with, and then you have the losses.

[bluestateguy]

21. They were slower to adapt to online purchasing of books than B&N

and yes their books and music is more expensive.

[Hubert Flottz]

7. Probably because they stocked too many Sarah Palin and Ann

Colter books and displayed them so proudly.

Edit...When I walk in a bookstore and see all that Reich Wing propaganda front and center, I forget what I went into that place after and leave ASAP.

[Dappleganger]

9. Borders always gave me that vibe, too...

while B&N has a more intelligent, left attitude (particularly by the staff).

[nodehopper]

19. I wonder how much of that is regional

The Borders I used to work at some years ago, in the Chicago area, seemed to have an informal policy of hiring lefty, hippie or punk, pierced, often queer folk with dyed hair, and let us wear whatever we wanted to work, whereas B&N had a dress code and was very "yuppie." The Borders in Chicago donated a lot of money to the Gay Pride parade every year, and all of the employees could "curate" the exhibits of "books to read" that the customers would see when first entering the store (and then could buy at a 20% discount). Given that we were all lefty, hippie or punk, pierced, often queer staff, the books that got profiled in this way were, like, Howard Zinn, Zora Neal Hurston, historically banned children's books, etc.

[RobinA]

39. I Preferred Borders

myself. I only started going to B&N reluctantly when they became more excessibile to me. BOTH stores are alienating me lately, because whereas they used to have everything when they opened, they now seem to be going with the lowest common denominater. So it's back to Amazon. I feel that they both are telling me, the customer not looking for best sellers and the latest CD, that I should just go to Amazon and take my quirky shopping habits out of their store. I really prefer a brick and mortar bookstore, but if I can't get what I want there...

[sweetloukillbot]

30. All bookstores have bestsellers displayed up front

The reason Coulter and O'Reilly's books are always prominently displayed is because they are bestsellers. Sad but true. When Rush Limbaugh is a Big Fat Idiot was a bestseller, that was prominently displayed as were Obama's two books. In my store, I built displays featuring Noam Chomsky, Michael Moore, Umberto Eco, Stephen Jay Gould and Kurt Vonnegut. I also built a display featuring Ayn Rand (mostly because we had a shitload of copies of her books that weren't selling). My store carried all sorts of books on how to grow your own hydroponic weed, the Anarchist cookbook, stuff on hacking, and according to one Nazi skinhead who was shopping at the store, the "Damn Jew version of Turner Diaries that makes fun of everything we stand for!"
There was one conservative who worked at my store - and he ended up quitting because he hated hearing all those damn liberals on the staff bitching about Bush. And this was in one of the most Republican parts of Phoenix.

[bongbong]

14. Still have my bookmark

I still have a circa 1980 Border's bookmark, which the original store in Ann Arbor gave you with a book purchase. Should I sell it on Ebay? :sarcasm:

[Vidar]

16. We have a wonderful local bookstore that just barely outclasses Borders,

but we definitely have the market for both and I'd be very sorry to see our Borders close.

[liberal N proud]

20. Sad

[BlueIris]

22. ACK.

Now I'm pissed. And no one can claim I didn't do my part.

[StarburstClock]

26. Overpriced CDs and Coulter Books Failed as a Business Model? LOL

I stopped going to the local Borders a few years ago after seeing that crap splattered all over the store.

[underpants]

27. Borders is to Kmart as Barnes&Nobles is to Macy's

I am not saying that that is how it is but that is perception.

Borders probably got stuck in leases the way that Circuit City did (okay no one can mismanage it THAT bad). Our local Borders is tucked away behind a Costco and you have to know it is there to know that it is there.

[struggle4progress]

28. Borders often seems to me a better outlet than B&N

The local Borders has more stuff I want than the local B&N

[canetoad]

36. Borders, Angus & Robertson go bust

Eli Greenblat
February 17, 2011 - 4:32PM
http://www.theage.com.au/business/borders-angus--robertson-go-bust-20110217-1axt9.html

Update Australian book chains Borders, Angus & Robertson and the Whitcoulls chain of newsagencies in New Zealand have been placed into voluntary administration by its private equity owners only a day after the Borders company in the US also collapsed.

The local companies have a combined staff of about 2500.

The failure of Borders in Australia is not linked to the woes facing its namesake in America - they are owned by different corporations - but both have suffered from the rise of internet book sales and constrained consumer spending.

[LeftishBrit]

37. Oh no.

[Le Taz Hot]

38. Now they know what all those mom-and-pop

book sellers felt like when they were forced out of business by Borders & B & N. My condolences to the workers, however. Too bad there aren't many privately-owned book stores at which they could apply.

[BlueIris]

40. Does anyone know how to find out which stores will close in which areas?

Or does the company hoard that information until they've informed staff?

[Vidar]

41. I'm sure someone already posted this but here's a list of which

stores are closing--by state: http://bordersreorganization.com/Reorganization_Closure_List.pdf