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.

Signs of Recession

I have not been personally affected by the current economic downturn - - yet. One of my friends was laid-off from GE, but that had been known about for years. He was able to find another job, with a commute of 90 miles each way.

Even without watching the news, I’ve seen the signs that things are not good, some subtle, some obvious.

On the subtle side, I called my dentist’s office on Monday to make an appointment for my check up and cleaning. They were able to book me for…today. I also called the optometrist and scheduled my eye checkup for Monday the 23rd In 20 years of making these kinds of appointments, I’ve never been able to book closer than a month in advance. But, in a recession, people begin putting off expenses they deem not immediately pressing, and in the absence of illness or other symptoms, that includes medical, dental, and eye care. If these items were not covered by my Progressive health plan, I’d probably be putting them off too.

On the obvious side, more and more stores are closing - - go to any mall and you’ll see for yourself. Restaurants are closing by the dozen, especially non-chain restaurants. As bad as the news from the auto and banking industries is, the frightening story you’re not hearing about in the media is the shutdown of small companies that make pieces/parts that supply the larger companies. Not just laying off, but shutting down. Once the economy recovers, larger companies will need the items these small companies produced, but it will be more difficult to restart them, which means more imports from God knows where.

Danny and I have been incredibly busy. The house is now more or less in order. Repairs needed to get us through the winter are complete, I bought a snow blower, and the Xmas decorations are up. The only item remaining on the agenda is to buy a medicine cabinet for the bathroom and replace the rather tacky option by the previous owner (he simply hung a mirror over the hole in the bathroom wall).

 

Instead of Xmas presents for each other, Danny and I each got something for the house. I bought the Washer/Dryer which was installed the day before we moved in. Danny got a 47” LCD TV last weekend. I think I’m going to indulge in some couch potato-hood this winter. 

 

The rest of the past month has been taken up with work and Mason. He’s growing by leaps and bounds, both in physical size and behavior. Mason weighed in at 14 pounds at the veterinarian’s office on Monday. He’s very smart and is mostly housetrained, although he has had a few accidents (such as last weekend when our friend Zsolt visited and Mason wet himself with excitement). He’s also freakishly neat. I’ve noticed that he places his toys back in his cage after finishing with them – often in the same spot in the cage where they were before. Although friendly, Mason is now basically a toddler, and is in the “terrible twos” stage of behavior. For the last week, he has been rebellious and testing the limits of what he can get away with. Danny and I try to be patient and give him an activity to appease his restlessness, or put him in a restricted area for a time out.

 

On the work front, things are proceeding apace with our project. Our team had a very heavy work load, so we were given a two week extension to complete our testing – which ends today. Despite the extension, not all our tests were completed, mostly due to system outages and tests which had to be listed as invalid. Management has asked us to divide into two shifts: one starting at 6am, the other at Noon. So, beginning next week, I’ll be setting the alarm for 4:30am. It actually works out well for me since Mason won’t be alone at home too long. Amusingly, I discovered a few weeks ago that I went to high school with one of the members of my team. Same school, same year. But she and I didn’t share any classes, apparently.

 

Danny and I have been appalled by the economic news, but I have not been especially surprised. America has been living a debt heavy lifestyle for too long, and the chickens have come home to roost. I really think that GM in particular has dug its own grave. Carrying eight brands of automobiles with that duplication of models (like the Pontiac G5, which is a rebadged Chevy Cobalt) was recipe for disaster. Troubling is GM’s apparent plan to ditch Saturn, one of their only brands to show any innovation over the past few years. I’m aware most Americans are opposed to any bailout of the Big Three. And as a Honda driver, I don’t see myself driving a Ford, GM, or Chrysler anytime soon. But we can’t afford to lose this industry, as clumsy and idiotically run as it is. I think the government should place them in receivership, and a reformer should be appointed who would have broad authority to nullify union and dealership contracts and reorganize the companies. GM should drop the Buick, GMC, and Hummer labels, and sell Daewoo. Saab and Saturn should be spun off into their own, independent, companies. Ford should eliminate the Mercury brand, sell Volvo and sell their stakes in Mazda and Aston Martin. Then Ford needs to learn marketing, build fewer models (one compact, one midsize, one luxury car model) and not change the model names every three years, which is confusing to consumers and annoying to dealers. (Honda and Toyota know how to market autos. Civics and Camrys have been around for decades and have a defined image). I don’t know enough about Chrysler’s situation to comment, but the PT Cruiser I had as a rental a few months ago was a total piece of crap.   


I've been following President-elect Obama's handling of the transition, and I've been very impressed.  He's picking strong leaders for the Cabinet, although I don't agree with every one of them on every issue.  Hillary Clinton at State is undoubtedly his most controversial pick so far.  But most Americans don't appreciate how incredibly popular both Clintons are world wide.  Hillary can help America restore its image as a leader rather than a bully.  I must also admit, to my surprise, that President Bush has been handling his end of the transition with a graciousness sadly lacking during the bulk of his reign.  By the way, this whole "smooth transition of power" thing is rather new.  The first president to pledge one was Harry Truman, who knew something about assuming power under difficult circumstances. 

 

Neither Danny nor I face an immediate threat to our jobs. Progressive is in pretty good shape (in fact, we seem to have profited from AIG’s troubles and have 337,000 more policies than a year ago), and people will always need health care – so Danny’s job is safe. Still, I have decided to reign in my furniture purchases for now, so the house will continue to have one empty bedroom and a partially furnished living room.

 

Time to enjoy the weekend…