I remember back in the late 90s and early 2000s when Borders outperformed Barnes & Nobel (B&N) on sales per square foot on a per store basis. B&N is doing fine. Borders is tottering on the edge of bankruptcy. What in the world happened over the past decade?
Borders canceled today’s auction to keep a smaller but still significant retail concern going. (It’s hard to have an auction when there are no bidders.) That means the 399 stores on the “short list” for a leaner and meaner Borders will be liquidated. Landlords and other creditors first protested plans to save the company but are now protesting the plan to close the company’s doors, so there may be some death throes – but sadly, it looks like the end is here.
Company President Mike Edwards said “We were all working hard towards a different outcome, but the headwinds we have been facing for quite some time, including the rapidly changing book industry, eReader revolution, and turbulent economy, have brought us to where we are now.”
If B&N is doing great – or at least holding their own in the same turbulent conditions – what happened to Borders?
A few quick and far from authoritative conjectures on my part include:
1. inventory management – every retailer has to carefully management open-to-buy dollars and inventory turns (how often a particular item sells out and has to be re-ordered) but from the publisher side of the table I thought Borders got too tight on order policies and left money on the table. A lot of people who are smarter than me will disagree with this. But I’m simple-minded enough to believe that if your business is book sales, you better make sure you have books on hand. Manage, yes. But don’t squeeze the life out of your product.
2. too much emphasis on “new” – publishers and book retailers have to (and love to) create new titles, but the most successful companies don’t forget about previous successes and find new ways to promote and re-introduce perennial sellers. This is the biggest advantage Amazon has – a catalog of 8 million titles, many nearly forgotten. B&N has had a much more robust in-house publishing program built around classics – and carried both more front and backlist titles per store. Even signage has indicated Border’s over emphasis on the new. I once spent a couple hours studying the signs the chain had placed in it’s “power corridor” in the front of their stores. Of 22 signs, 18 had the word “new” on it. I know “new” is a powerful word and I’m all for new titles. I LOVE new titles. I’m simply stating that in my opinion Borders didn’t emphasize backlist enough.
3. the electronic revolution – Amazon introduced the Kindle, Apple the iPad, and Barnes & Nobel the Nook. Borders did a great job with email specials and coupons (there’s that emphasis primarily on what’s new again) – but never established itself as a destination for online sales of physical books or electronic books.
4. coffee – I think Borders coffee is fine but their cafes have never seemed to pack the punch of the “Starbucks branding” that B&N built their cafes around. Many people still don’t know that the Barnes & Nobel Cafe is not a Starbucks!
It’s easy for me to throw out ideas while good friends and a valuable publishing partner has fought for its life. Anything I’ve noted is not intended to be a casting of the “first stone.” Retail in all categories is a tough and tumultuous world. Who knows what the future holds for Barnes & Nobel.
And bottom line, I feel rather sad about a world without Borders …
