I’ve been following the bankruptcy of Borders for a while now (see here for my last post on the subject), and came across another good piece that analyzes the issue. A second new analysis by the former head of Borders UK examines some of the reasons for the bankruptcy. The short answer is that, well, it’s complicated and a result of a series of screw-ups on Borders’ part that go back years.
In any case, it’s sad that so many brick-and-mortar bookstores will be closing (and no, I doubt that this first wave of 200+ closures will be the last), particularly since Borders and Barnes & Noble have already helped drive so many independent bookstores out of business. I suspect we’re going to see an increasing number of communities around the country lacking convenient access to physical bookstores. (For an example of one such community, you have only to look at the 200,000-person city of Laredo, Texas, which lost its last bookstore in 2009. There is hope on that front, however, as Books-a-Million has recently announced that it will be opening a new store in Laredo.)
It’s funny, my wife and I went to our local Borders’ store closing event last weekend, and pretty much everything in the store was marked down by 20%. The place was absolutely packed, and the checkout line verged on a Christmas Eve level of customers. The whole thing was silly though, because after you factor in the local 6.75% sales tax, people were clamoring to buy books at around 15% full retail. Which is silly, given how frequent 33-50% off store coupons have been, and how deep Amazon’s discounts are. Why would I want to buy a book for 15% off, when I could wait a few days and get the same book for around 30% off? One of the exceptions was the magazine section — magazines were marked down 40%, and I did buy one of them. It highlights the problem that brick-and-mortar new bookstores have: why exactly would customers buy books from them? Businesses win customers because they either provide a unique good or service, or can beat their competitors on price or customer service. And providing a nice browsing experience/environment and decent customer service just isn’t enough to survive, I suspect.