Monday, September 12, 2011

Borders: a post-mortem

Well, it’s over. The last Borders bookstore closed today – ironically, the same place where the first one opened in 1971: Ann Arbor, Michigan. For years, I was a regular at the La Place Borders. Their Classical CD selection couldn’t be beat locally, and I was building a collection. Music of Note on Shaker Square had recently closed, and The Music Box was long gone.

I was peripherally linked with Borders. From 1985-1986 and again from 1994-1997, I was employed by Waldenbooks. In the 1990s, K-mart owned Waldens, along with Brentano’s and Borders Bookstores (at the time, a small chain based in Ann Arbor, Michigan). By the middle ‘90s, K-mart was in something of a financial crunch and was seeking outside investors. One group of fundamentalist Christian investors balked at the prospect of investing in K-mart because Waldenbooks sold Playboy, Penthouse, and the like. So, in order to secure investor money, K-mart merged Waldens and Borders and spun them off into their own company: The Borders Group. By the way, it was around that time that Waldenbooks and B. Dalton Booksellers were fined by the FTC for colluding on the closing of bookstores at several locations (in other words: Walden and B. Dalton agreed that “if you close your store at Mall A, we’ll close ours at Mall B”) a gross violation of anti-trust laws.

I was working at Waldenbooks when the Borders spinoff happened. At the time, we thought Borders was the wave of the future. Those big stores with their comfy leather chairs, coffee shops, and huge selection were irresistible, and Borders started popping up everywhere. Borders’ rapid growth was at the expense of mall based bookstores like Waldenbooks and B. Dalton – and independent stores suffered even more. By 1997, the writing was on the wall for Waldenbooks: Who wanted to shop for books in cramped stores in the midst of thug-infested malls? The paucity of remaining Waldens meant that it was impossible to advance working there. Many Waldenbooks employees started interviewing at Borders. Even Waldenbooks managers took clerk jobs at Borders - the pay and benefits were competitive (mostly because Walden pay was lousy). I myself left Walden that year and went into a totally different arena.
Whatever the selection at Borders, once the competition from independents was gone, Borders was charging full price on their Classical CDs and only discounted bestselling and remaindered books. Then the Internet came along and by 2000, I was usually buying my CDs at Amazon or other online retailers for less money – and I could even listen to a sample online. What had happened to the independents was now happening to Borders, and their classical selection dwindled.

Borders is not just a victim of changes in the way people shop. In some ways, I think Borders is the victim of its own expansion. Just a few years ago, there were Borders, B&N or Jo-Beth in Richmond Heights, Cleveland Heights, Lyndhurst, Beachwood, and Woodmere. The technical term for this is Market Saturation. Far more than the local population could sustain - especially with retail rents which have increased far beyond inflation. Jo-Beth was the first to go belly up, about a year ago.

This brings up the question: “Why have Jo-Beth and Borders gone out of business yet Barnes & Noble is still running?” I think it’s a combination of several good decisions on the part of B&N management: 1. B&N made better decisions on where to open stores and did not hesitate to dump locations that were not profitable – such as at Richmond Town Square; 2. B&N was much more savvy on the electronic side of business, with a better website, e-books, and enabling customers to listen to samples of CDs they were browsing just by running the bar code under a scanner.

There is also the e-book factor. I prefer real books myself. But I know someone who travels frequently, and the e-book is a great convenience: It's not heavy, more portable since you can store several books in one package, and if you're reading while eating, you don't have to hold the pages open. Borders totally missed the boat on this one.

Fortunately, some independent bookstores survived – but not many music stores with a good selection of Classical music. When I was in Montpelier, Vermont last September, I visited at least five bookstores all within walking distance of each other. Borders never bothered with small towns like Montpelier (the only state capitol without a McDonald’s). A few stores in Ohio, like Fireside Books in Chagrin Falls and Mac’s Backs on Coventry, have survived the life and death of Borders.

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