Business Week has just posted a long, interesting post-mortem of the Borders book chain. The article also includes a nice history of the company. I haven’t posted about Borders in a good while — since it went out of business and all — and this may well be my final post on the topic. Some points I found interesting in the linked article:
* “When Borders declared bankruptcy in February, more than 200 of its 400 outlets were still ‘highly profitable,’ says its final chief executive officer, Mike Edwards.” Location, location, location. Some were good, others not so good. It’s really too bad that Borders’ overall debt picture was sufficiently poor that it was unable to restructure itself, close the unprofitable locations, focus on the ones that were working, and rebuild itself a leaner, meaner company.
* Suggested factors for Borders’ demise:
— The downturn in the economy.
— Tough competition from Amazon.
— Extremely late (and poor) embrace of online book retailing.
— Too much in investment in CDs and DVDs, just as customers were switching to digital downloads.
— Too much expansion of brick-and-mortar locations. Good locations are the key for bookstores, and a larger physical footprint may not be better.
* Brick-and-mortar stores can’t really compete based on having a large in-house inventory. No matter how large the store’s inventory is, it’s nothing compared to Amazon, which essentially stocks all in-print books, among other items.
* Barnes & Noble may have to start trimming its own less-than-profitable locations. We’ve seen just a few hints that this may indeed be going on, so perhaps there is some traction to the idea of an upcoming B&N downsizing. keep your eyes peeled for more indications that this is happening.