How Borders Flailed then Failed …Plus Notes on the Future of Retailing

By Arthur Rosenberg Senior Editor The last time Borders actually made a profit was back in 2006. Since then its yearly income had dropped by more than $1.3 billion over the course of just four years. In very simple terms this pretty much sums up Border’s recent descent in fortunes as the company slid down the path towards bankruptcy, rapidly followed by its ultimate liquidation, after a totally unsuccessful, last ditch attempt to auction itself off resulted in a total of zero bidders.

Founded in 1971, Borders operated 1,249 Borders and book stores at its peak in 2003. However the company struggled with challenges to adapt to a rapidly morphing industry, especially in terms of game changing opportunities posed by the Internet and radical shifts of market-centric electronics.

Failed Challenges

Failure to directly address the then brave new world of e-commerce and to create a distinct concept on the Internet cost the company valuable branding, customer loyalty and a range of untold sales opportunities. The birth of music and video downloads followed by the inception of e-readers, cost the company vital book, music and video sales as it failed to anticipate and rapidly adapt to popular new technologies.

Ultimately, both traditional and non-traditional competitors were often able to out-price and out- market Borders so that it lost sales from previously loyal customers. This year alone, since it filed for bankruptcy protection in February, the company has shuttered over six hundred forty stores and released nearly twenty thousand employees. Talk about recessionary cuts.

The Big Question?

The question posed by many following the somewhat sudden, though not surprising liquidation of Borders, seems to be regarding where to place the blame for the demise of the long-time number two brick and mortar book retailer. While many question the long-term (and short-term) wisdom of the company’s corporate management, others wonder if the company’s end was inevitable based on the book world’s morphing landscape, especially due to the game changing, rapid growth in demand for e- and e-publications.

The public’s eager acceptance of the concept of e-books and the technology behind it, followed by the rapid rise of its sales, likely doomed Border’s future as this phenomenon has cast a pall over much of the future of traditional book retailing. Still Barnes & Noble continues to tweak its business model toward a commanding focus on e-books. With a different approach, Books-A-Million has long demonstrated an ability to carefully select successful new locations and has thus watched as nearby Borders and Barnes & Noble locations closed down. Independent and specialty booksellers and discount chains such as show current signs of strength.

3 www.ChainStoreGuide.com | 800.778.9794 | [email protected] Background

Ironically it was the inception of the books superstore, grown nationally by Borders and Barnes & Noble, which caused the closure of many long-term independents as far back as the 1980s and well into the 1990s. The superstores were able to out-price independents, while offering vastly greater selections of books, music and ultimately movies within the relaxed atmosphere of a fine coffee shop, ultimately offering free WI-FI. They also had infinitely greater resources with which to design and fund comprehensive websites on that latest of creations, the Internet.

The current comeback of the independent book dealer is largely due to far superior customer service based on product and customer knowledge at the store level, as well as, to the closing of numerous Borders and Waldenbooks locations over the past few years. Many of these vacancies left communities with book vacuums of sorts. This was all too apparent even prior to the announcement of Border’s entry into bankruptcy and its ultimate liquidation.

The had shuttered nearly six hundred locations during the five years preceding its announcement of bankruptcy early this year. We also witnessed the demise of key Barnes & Noble locations, often due to escalating local real estate costs, as was the case of the vacated, multi-story gem by New York’s glamorous Lincoln Center. Upon completion of its liquidation, Borders will have closed more than six hundred forty locations in the months since its entrance into bankruptcy.

Traditional chains too can still compete even if their names are not Barnes & Noble. As noted Books-A-Million continues to aggressively compete in a fairly traditional way by employing clever management and real estate diagnostics. Specialty chains of course continue to enjoy their particular niche while often sharpening their electronic marketing and merchandising skills.

Border’s Management

As to the questions concerning the culpability of Border’s management in leading the company to its demise, perhaps the operable term should be Border’s managements. As an editor at Chain Store Guide, I am responsible for closely monitoring the several thousand companies which comprise the files for which I am responsible. This includes searching for executive changes within the companies I cover.

Through the years Border’s communications revealed a wealth of executive changes and even shakeups on the corporate level. As time went by however, this constant executive movement suggested an atmosphere of upheaval which gave way to the feeling of a company in overall flux, always congratulating its newcomers as the clear-cut solution to its then current set of challenges and problems.

The same was true of the company’s market strategies. Periodically the company would announce a considerable shift in the course of its strategic plans, often seemingly based on watershed ideas designed to stem the tide of declining financial indicators. Again, over time it became apparent that the company was continually seeking strategic shifts and then proudly pronouncing these as the then final piece to the puzzle of competition. Over time it seemed that puzzled was the operative word for Borders ever changing management turns.

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Comprehensive and definitive and foodservice intelligence A telling example of these questionable management upheavals occurred during what essentially proved to be a company era, which spanned the year 2009. In late 2008, Borders finally pulled the plug on its partnership with Amazon.com and launched its own independent website.

In January 2009, the company announced that Ron Marshall would take over as CEO. Former CEO George L. Jones received a severance package of $2.09 million. The company also replaced its CFO and a week later a new Chairman of the Board was announced.

The changes in management were largely due to Borders’ holiday sales having fallen off by 11.7 percent. Noting the date, this was a particularly troublesome holiday season for most companies across the retailing spectrum. Indeed the recession had blanketed most of the nation with financial worries. Also, let’s not forget about the timing of Borders dropping Amazon’s services and taking on many web related responsibilities for the first time. Just over a half year later Borders had replaced more than half the members on its Board of Directors.

The Marshall administration’s first holiday season paled in comparison to the dismal one that had brought it into power. 2009 holiday sales were down 14.7 as the company announced that it would close a number of its Waldenbooks stores in an effort to improve profitability.

In late January 2010, Ron Marshall resigned to become President and CEO of The Great Atlantic & Pacific Tea Co. (A&P). During his tenure at Borders, all of the top executive officers resigned or were encouraged to leave, including several who had been with the company for over two decades. Following his departure, Borders stock fell below one dollar per share. A&P hasn’t performed much better.

Management Styles

Companies steeply challenged by conditions of the marketplace have basically two avenues from which to determine solutions to these problems. One is to consult with customers and outside experts to gain perspective. The second is to brainstorm within the current management base.

If this latter process is employed and fails to work, the next step is often to tweak key areas of management and brainstorm again. Should this effort not produce adequate results, an overhaul of top management is often the result, with yet another round of brainstorming after the golden parachutes have been issued.

It seems to me that Borders employed much of this latter corporate design. Blockbuster was another victim of this hubris of corporate think as I stated earlier this year in a CSG Insight. As I mentioned within that insight, Best Buy, though far from being on the brink of ruin, often displayed a similar hubris. Recently the company announced that they are hoping to lease first ten, then twenty percent of their in-store selling space to other retailers. They have also recently reversed long term, rigidly held customer policies including doing away with restocking fees, in an attempt to regain customer momentum and reverse troubling financials.

4 5 www.ChainStoreGuide.com | 800.778.9794 | [email protected] At the same time Apple continues on as our nation’s (and likely the world’s) most admired retailer. Apple began its corporate retail operations just a decade ago and opened its first stores to a lot of doubts from industry experts. Opinion makers scoffed at the notion of a manufacturer of a relatively narrow line of products opening a chain of retail stores. However, company founder Steve Jobs was on a mission, not unlike those he pilots when launching revolutionary, game-changing new products.

Jobs decided that the key obligations needed to achieve success for his envisioned retail stores were strong customer service based on a management team which would eagerly seek out and apply customer ideas and opinions. Jobs wanted to emulate a natural model for customer service and decided to forgo a study of retailing and instead invested heavily in the study and corporate promotion of customer service as practiced by the hotel industry. He carefully selected Ron Johnson, a Target visionary, to head his retail operations. The rest is an incredibly successful and most admired history, all within a decade.

Challenges of New Technologies

Book retailing has faced a myriad of challenges through the past two decades. It is likely the two greatest challenges were brought on by the birth, incredible versatility and rapidly rising popularity of the Internet and the advent of e-books. To both of these challenges Borders management employed strategies that were at best weak, while being short-sighted and at times almost lazy. Rather than seeing opportunities for growth, they seemed to shrink from new responsibilities as these required vast reserves of energy.

There is a somewhat infamous story circulating about the time Borders executives were surprised at the receipt of a case of champagne as a gift from a company then newly partnering as an Internet provider. It was August 2001 and the gift had been sent by Jeffrey Bezos, founder, Chairman, President and CEO of Amazon. Word has it that Bezos coveted more than just a partnership and used the relationship to cultivate customers. At the very least, Borders strategic control of its fledgling Internet platform was then virtually non-existent.

Whereas Barnes & Noble created a full subsidiary, Barnes&Noble.com, to focus on the promise of the worldwide web, Borders took what at the time seemed the easy path to go with a proven partner in facing the relatively new and formidable concept of e-commerce. At the time, Border’s management chose this approach thinking it would permit the company to better focus on growing its flourishing superstore model.

To be sure, Borders wasn’t the only brick-and-mortar to partner with Amazon. In fact, most of these companies suffered their Amazon partnerships, realized their lack of control on the requirements of this new and rapidly growing sales platform and got out relatively quickly. Toys-R-Us is another example here. Their tryst with Amazon ended in a bitter lawsuit which Toys-R-Us won.

Borders relied on Amazon for virtually all web-based activity. Borders never really had to develop a vision for its Internet presence. Thus its website never lived up to its potential as the company failed to truly focus on its emerging, distinct electronic clientele base. Worse still, management failed to anticipate, confront and problem-solve the many potentially very profitable challenges posed by the relatively new fields of e-commerce and web design.

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Comprehensive and definitive retail and foodservice intelligence Challenges of Slightly Older Technologies

Borders management also ran into problems with the merchandising of more conventional electronics-based items. By 2006, sales of CDs and DVDs had been generating well over half a billion dollars in corporate sales as Borders announced efforts to further accommodate their electronic media customers. Three years later these sales had declined by thirty eight percent as electronic downloads from companies such as Apple became the vogue for acquiring music. As if that wasn’t enough, was hitting its stride and was gaining a reputation for making video rentals a better value than owning DVDs.

Finally, but Late to the Games

When Borders finally did debut its own website in 2008, it had been a year sinceAmazon had first announced its Kindle. Of course this coincided with another national announcement, the government’s admission of the worst recession since the Great Depression.

Fighting troubling annual financials and a now stingy banking system, Borders was in a weak position to properly invest in its new website or in the coming of the rapidly advancing e-book revolution. As Barnes & Noble followed Amazon’s Kindle by introducing its own device, the Nook, Borders again decided to go outside its big box and invested in a partnership with Canadian manufacturer, Kobo Inc.

It wasn’t until 2010 that Borders was able to introduce an e-book store powered by Kobo. By this time its stores were offering several grades of e-readers by various manufacturers including Kobo, in kind of a shotgun approach. Amazon and Barnes & Noble continued to follow their profitable and simple singular, proprietary e-reading paths.

Late last year I visited a Borders location, in large part to see how they handled in-store sales of their e-reader herd. The sales people were most attentive and seemed fairly well informed. Unfortunately, prices for consumer electronics tend to slide rapidly and the promotional signs at the e-reader station indicated slightly higher prices than the company was actually currently charging. At the same time Barnes & Noble was announcing expertly staffed, dedicated Nook booths at its stores while Amazon stated that e-book sales had begun exceeding sales for traditional fare.

More Challengers

Border’s trials were not limited to the budding world of book retailing electronics, e-commerce, e-reading and otherwise. Non-traditional retailers also had a role in forcing the hand of Borders. Over the past couple of years a best-seller price war began to erupt between big box giants, always on the lookout for additional income sources.

Walmart began by offering best sellers and popular, trendy books at great discounts and at times as loss leaders. Of course Target and Costco had to follow. Ultimately decided to enter the arena with both fists, as both and Sears’s stores saw bargain books as a means to show a dwindling customer base that they still had versatility.

These moves had less effect on independents and specialty book retailers as they rely less on sales from best sellers and more on the more dedicated and obscure volumes which appeal to their loyal 6 customer base. 7 www.ChainStoreGuide.com | 800.778.9794 | [email protected] Ancillary and International Capital Opportunities Squandered

Amazon recently announced yet another in its carefully calculated string of acquisitions. Most Amazon acquisitions have added to the company’s climate as a diverse marketplace with a fairly clear corporate culture. These acquisitions have permitted Amazon to price competitors out of the book, music and video markets by at times leveraging ancillary capital streams to balance loss leaders in traditional areas.

This latest acquisition however was not a domestic ancillary venture. Amazon acquired its British rival, The Book Depository, in a move that industry experts warn could tighten Amazon’s ‘stranglehold’ over online book competition in the UK. This should likely increase Amazon’s financial clout and make it an even greater predator in the book world.

With all of Border’s recent travails, many forget that until not too long ago the company operated a fairly sizeable international empire of bookstores. In 1997, the company established its first international store in which was also that country’s largest bookstore at the time.

Borders later opened a forty one store chain in the , as well as stores in , Australia, and New Zealand. Borders also bought thirty five Books etc. stores located throughout Great Britain from the store’s founders. Eventually the company also franchised stores in Dubai, Oman and Malaysia.

Sadly in a little over a decade the company’s overseas empire had all but disappeared. In 1998, Borders (UK) Ltd was established as a Borders Group subsidiary. This entity included Borders and Books etc. and quickly became one of the country’s leading booksellers. Ultimately fierce competition in the UK forced a number of the Books etc. stores to close. Borders (UK) Ltd. was sold in 2007 to a private equity investor.

By late 2009 Borders (UK) Ltd was placed into the equivalent of Chapter 11 bankruptcy protection. A month later the chain started closing down. At this point all of Borders directly owned overseas locations had been sold or closed, leaving only the franchise stores in Dubai, Oman and Malaysia.

The Future

Several years ago, a speaker at a seminar in store design and functionality emphasized the experiences and feelings his wife had pronounced about shopping. Her favorite retail venues were book superstores. She often visited them during lengthy shopping trips. Moreover, when the stresses of life got to her, she would take at least a two hour ‘vacation’ at a nearby superstore to survey and buy some books and magazines and indulge in some coffee and dessert. Students too seem to enjoy this atmosphere as a study venue. Check out the nearest book superstores. This hasn’t changed and isn’t likely to for some time.

As to the future of bookstores, many note the continuing importance of the brick and mortars for their ability to attract readers and promote new and cutting edge offerings and authors. Not to be overlooked are the popular meet-and-greet signing tours which publishers find so advantageous. Unfortunately, one of Borders problems was that many of its customers visited its stores to explore new titles but went to Amazon anticipating lower prices. (Note: The assumption here is that they were bypassing the Borders website with its higher price reputation). 8

Comprehensive and definitive retail and foodservice intelligence The loss of Borders locations may also make it more difficult for new writers to be discovered. The many professionals who were expert at promoting, recommending and selling books must now find other work from their dwindling ranks. That is a terrible loss for authors, agents, and publishers.

Indeed one of the chief concerns of authors and publishers in the post Borders world is the loss of hundreds of venues which attracted consumers seeking out distinct and intelligent gift ideas. Children’s publications are a big factor here. This loss even affects the world of readers of e-books who are known to explore traditional stores for titles, only to pull out an e-reader and make a purchase through the store or online.

The fact that so many brick and mortar book retailers currently show signs of strength in such a challenged market, during a historically stifling economic crisis, is a positive sign for the industry. From independents to specialty book retailers to the Books-A-Millions and Barnes & Nobles we see promising financials and even growth.

In fact book retailers are becoming increasingly aggressive in their desire to survive and even thrive. Independent bookstores, whose sales comprise about ten percent of the overall market, are creating websites that sell printed and electronic books at prices that rival those of Amazon and Barnes & Noble. These website launches are among the latest moves in an effort to compete in a rapidly changing industry. The challenge remains in the difficulty of getting customers to think of independents as places to buy books online.

Of course, just a few years ago Amazon had to show the public a new way in which to purchase books from a new kind of company through the then newly ‘coined’ concept called the Internet. It would seem that the current challenge of independents introducing the viability of their websites should be a lot simpler than Amazon’s challenges at its inception.

The recent surge of strength shown by independents is based on their strong customer knowledge and identity within the community. Readers are an essentially devoted breed and increasingly appreciative of the fragility of the state of book stores, especially after the perceived gigantic void left by the demise of Borders.

This breeds unusually strong bonds of customer loyalty. With the current wave of market initiatives by independents, combined with the loss of all Borders locations, while Barnes & Noble stakes its future on digital technology, there is as strong likelihood that the big bookstore’s only future will be in big cities.

The Survivors

Not surprisingly, current brick and mortars, including independents, are experimenting with adding more non-traditional products to their mix. In addition to in-store cafes they are trying tie-in promotions, featuring products such as toys, games, comics, and decorative items associated with popular books, recordings and movies. Some are experimenting by offering lessons in crafts and skills associated with popular book themes. Others feature wine and cheese festivals on scheduled evenings, as a tie in with books in the cooking section.

8 9 www.ChainStoreGuide.com | 800.778.9794 | [email protected] After Borders entry into bankruptcy early this year, Barnes & Noble found itself negatively impacted by the initial round of Border’s liquidation sales. With the final stage of nearly four hundred Borders liquidations at hand, this should further add to the immediate woes of the Barnes & Noble bottom line. However, when the liquidations are an afterthought as we enter the holiday season, Barnes & Noble is expected to reap the rewards of life without its chief, traditional competitor. Analysts expect that ultimately Barnes & Noble could gain $220 million to $330 million in revenue, or about ten percent to fifteen percent of Borders annual take.

As Barnes & Noble sees it, its future is clearly steeped in digital. As reading habits transfer ever faster from the world of hard covers and to electronic reading devices, B&N is attempting to reinvent itself as a seller of downloads, reading devices and apps.

The Barnes & Noble Shift

The shift in the B&N platform became crystal clear early this year when the company purged an elite group of experienced book buyers. With Barnes & Noble’s buying power behind them, along with their wealth of knowledge, these buyers had been admired by industry denizens as subtle power brokers and trend setters. Their decisions and deals were eagerly anticipated by publishers, authors and agents. But for the company it was a matter of reading into the future and anteing up the considerable investments required to insure the e-future. Even today, customers at BarnesandNoble.com order three digital books for each print book sold.

An Out-of-Market Perspective

Several analysts have compared the potential effects of Border’s demise to that of Circuit City and the survival of Barnes & Noble to that of Best Buy. While a reasonable comparison, prior to its eleventh hour, there were three strong suitors hoping to acquire Circuit City. These investors were thwarted largely by the fact that the nation was still in the relatively early stages of the banking crisis.

While the investors offered formidable portfolios, banks were running scared and were more than reluctant to involve themselves in so great a project at a time when the economy was even more uncertain than was the state of banking. Borders, on the other hand, put itself up for bid near the end and received nothing more than a tentative nibble for select locations.

At the time of the Circuit City liquidation most analysts anticipated a treasure trove for Best Buy. While Best Buy did reap some rewards, these were far smaller than had been anticipated. This was in part due to the burgeoning competition on the Internet from several young, Internet-only CE dealers such as Newegg.com, as well as, the much sought out sites of several well-reputed, independent brick and mortars, most notably New York City based J & R Music & Computer World and B&H Photo-Video. Sadly for Best Buy, a number of sound regional chains continued to claim the hearts and minds of local CE enthusiasts.

With Borders gone, few brick and mortars carry even a small percentage of the clout of Barnes & Noble. Even those competing from other retail markets such as Walmart, Target and Costco cannot hope to approach Barnes & Noble’s reputation and knowledge beyond best sellers and the most popular of titles. Barnes & Noble also maintains an exemplary reputation as the leading source for titles among college and university students. 10 Comprehensive and definitive retail and foodservice intelligence Hitting the Economy

As Borders put itself up for auction there was a great deal of speculation as to the effects of a very possible liquidation. It is estimated that around 11,000 jobs will be lost during and after the final liquidations.

Real Estate interests speculate on the complex long-term effects of the vast measure of Border’s store closings. While the overall national real estate market is a bit stronger than it was 2-3 years ago, many of the Borders closures are of the superstore size and that limits the number of retailers eligible to take them over. Also a number were built to Borders specifications including two-story locations. These will likely require prohibitively expensive retrofits or remodels to accommodate another retailer.

With Best Buy shrinking the size of its locations and Staples announcing the reduction of its larger prototypes, it must be anticipated that other big box retailers are likely to follow. This only serves to further limit the real estate opportunities that Borders closures present.

As seems typical of Border’s fortunes, Books-A-Million’s efforts to close a deal to fully acquire the inventory, fixtures, equipment and leasehold interests for 30 Borders stores ended unsuccessfully because the companies could not agree on terms before the going out of business sales at these locations commenced.

Days later this news was offset as shopping center owner Cafaro Co., announced that Books-A- Million will fill vacant and soon-to-be vacant spaces, most formerly occupied by book stores, as these sites become available in its malls around the country. Most, though not all, of the sites that are expected to be filled are former Border’s locations. The announcement made it clear that all locations are expected to reopen as Books-A-Millions prior to the start of the 2011 holiday season.

Borders Could Live On, Even After Its Stores Close

As with many retailers that have recently met their demise, it is likely that the Borders brand name may well continue a profitable existence, even after the liquidation of its final multitude of stores.A September 14, auction of the company’s intellectual property has been scheduled. This will include the Borders.com website.

Company management indicated that it wants to sell the right to use the Borders’s logo, its trademarks, customer membership lists and other intangible properties. The move follows the path of other now-defunct retailers including Circuit City, Linen ‘n Things and The Sharper Image, whose brand names continue to attract online customers. The Sharper Image has become little more than a licensor of its name for products ranging from juicers and ‘wave’ cookers to backpacks.

10 11 www.ChainStoreGuide.com | 800.778.9794 | [email protected] About Chain Store Guide:

In addition to its section covering specialty book retailers such as Barnes & Noble, Books-A-Million and Half Price Books, Chain Store Guide’s database of Discount Stores & Specialty Retailers, features comprehensive listings of non-traditional powers affecting book retailing, as referenced above. Leading discounters such as Walmart, Costco, Target and Kmart are strongly represented with highly detailed, in-depth listings in our section of Discount Department Stores.

The aggressively growing and ever-expanding Amazon.com is listed in our section of General Merchandise Retailers. Though initially making its mark by selling books and shortly thereafter music and movies, Amazon’s prominent web based store acquisitions have made it a formidable player in markets ranging from shoes to consumer electronics to cookware.

I also referenced Best Buy and its steep competition coming from regional CE chains as well as non-traditional CE retailers. Consumer electronics and computer dealers have eagerly become partners with book retailers in promoting and selling their proprietary e-readers as well as the growing myriad of devices which support the downloading of e-books among many other functions.

While Barnes & Noble recently announced a partnership with OfficeMax to sell its Nook e-readers, Amazon announced a partnership with Toys R US to carry its Kindle with an eye towards the future, selling for children. Previously B&N had announced partnerships with Best Buy, Walmart, Staples and Fred Meyer, while Target, Best Buy, RadioShack and AT&T stores had inked deals to sell the Kindle.

Chain Store Guide’s database of Discount Stores & Specialty Retailers features sections laden with in-depth data on these retailers of e-readers and related products including iPads, tablets and smart phones. Our section for CE Retailers features not only national powers Best Buy, RadioShack and Sony Style (Sony offers its own branded e-readers) but also their tough regional competitors including Fry’s Electronics, BrandsMart USA, Conn’s and hhgregg. Listed powerful independents include the aforementioned J & R and B& H. Internet-only CE forces include Newegg.com. This section also includes national and regional mobile device retailers including AT&T, Sprint, Verizon and MetroPCS.

Our section of Computer Retailers includes everyone from Apple to Microsoft to the mighty, resurgent CompUSA. Staples and OfficeMax and their like can be found in our section of Office Products/Stationery Stores. Though OfficeMax only recently signed on to partner with Barnes & Noble to promote its Nook, it must be remembered that a large part of its customer base is made up of businesses. Both OfficeMax and Barnes & Noble see this as an opportunity to access business customers and introduce the Nook as an efficient and cost effective aid to business readers while selling products to companies in multiples.

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Comprehensive and definitive retail and foodservice intelligence Conclusion:

In a time where our country is hoping to avoid a second dip in the worst recession since the Great Depression, the sudden loss of thousands of jobs from one company, for the second time within eight months, is staggering. Similarly the real estate implications, though far from crystal clear, are imposing. As monthly fears mount as to the future of the recession, retail real estate vacancies continue to mount. Mall owners are aggressively seeking first time tenants and one time freestanding retailers as new age anchors. Borders many unique locations and difficult to retrofit store designs are likely to add to the glut of available retail space.

Chain Store Guide’s vast locations database offers individual listings for each of the nearly four hundred Borders stores to be closed, as part of its final liquidation. This database also includes locations closed earlier this year as an immediate result of the company’s entrance into bankruptcy.

Many see Border’s demise as a sign that the challenges of book retailing may be too much for brick and mortar retailers to overcome. However, as shown above, it is clear that Border’s various management iterations often were less than lucid in anticipating solutions to the true challenges that game changers such as the advent of the Internet and e-books offered.

As Barnes & Noble heavily invests toward its electronics future and Books-A-Million continues to aggressively pick up desirable real estate (often at recessionary prices), it is clear that while book retailing is not for the feint of heart or imagination, this is an industry that is still exploring its new frontier.

Arthur Rosenberg, Senior Editor Arthur has worked at Chain Store Guide for 20 years. He received a B.A. degree from City College of New York and attained a master’s degree in electronic communications from Brooklyn College. Please contact him at [email protected] if you have questions or comments.

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