As Its Final Stores Close, We Ask: What Happened To Borders?
The final 31 Borders stores across 18 states will close on Sunday, ending the story of what was once one of the largest book retailers in the world.
Six years ago, according to Bloomberg, the Ann Arbor-based company had more than 1,200 stores, including branches in the UK, Australia and Singapore. At the time of its announced closure in July of this year, 399 stores were still in operation, providing work for approximately 10,700 employees.
Borders was founded in 1971 by Tom and Louis Borders, University of Michigan graduates who took over an 800-sq foot used bookstore. Publisher Peter Osnos wrote on The Atlantic website that part of their unique offering was that they had developed "an inventory tracking system that, by the standards of the time, was as sophisticated as computers allowed." Ironically, it was the company's inability to adapt fast enough to the growth of online commerce that contributed to its downfall.
In 1991, Borders was sold by its founders to Kmart, who already owned the book chain Waldens, for $125m. The group was later spun off from the firm and floated on the stock exchange in 1995.
The company's final CEO, Mike Edwards, told the Detroit News that "I thought we'd acquire Barnes & Noble or they'd acquire us. I didn't think the two stores could operate independently."
Edwards, who walked away with a severance check worth $125,000, said that working at the company in it final days "was like finding out your best friend has cancer and there's nothing you can do. We were in perpetual crisis."
He cited many of the company's problems as stemming from decisions by previous CEOs, of which there were several in its final decade, to expand its network of stores while not focusing enough on the growing appetite of consumers for online shopping. According to the Wall Street Journal, its own online business was even being run by its leading competitor, Amazon, right up until 2008.
Although the company is all but dead, the name "Borders" may not disappear. Various assets, including the name itself, were sold at auction on Wednesday for $15.775m, subject to bankruptcy court approval.
While the bankruptcy has been distressing for the book and magazine publishers who lost money, many of them small operations, and the thousands of people who lost their jobs, a small good-news story has emerged from the closure of Borders book stores. GOOD's website reports that more than 8,000 "academic quality" books have been donated to Chicago's public schools by Hilco Trading, one of the two companies handling the bankruptcy.
With 717 stores currently in operation, Barnes & Noble is currently the largest bookstore chain in the country. A USA Today report in February this year quoted research by Prof Albert Greco of Fordham University that stated that "Amazon ha[d] 22.6% of the book market - ahead of Barnes & Noble (17.3%), Borders (8.1%), Books-A-Million (3%) and independents (6%)."
Over recent months, the closing-down offers at Borders have affected sales figures at Barnes & Noble, though the retailer is expected to benefit overall from the demise of Borders.
Meanwhile, Amazon's online sales figures continue to rise, as the Seattle-based firm consolidates its position as the country's leading retailer of both physical and e-books. With Borders gone, the future of mainstream, Main Street book retailers is more uncertain than ever.
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First Posted: 09/16/11 10:29 AM ET Updated: 09/16/11 11:04 AM ET