The Daily Show: Borders liquidating its remaining stores
The Daily Show last night highlighted a part on the decline of Borders.
Author and comedian John Hodgman asked Jon Stewart,
“Did you know books used to be available in what was called ‘bookstores?'”
The Borders company was founded in 1971 in Ann Arbor, Mich., as a used bookstore. In these 40 years of existence, Borders had to struggle in a very competitive retail environment when the management was constantly changing. At the end, Borders failed to compete effectively with online retailers and to move aggressively into digital books.
Today, a group of liquidators are closing the remaining 399 Borders stores. This will leave 10,700 people out of job.
Mike Edwards, Borders’ president, said in a statement.
“The headwinds we have been facing for quite some time, including the rapidly changing book industry, e-reader revolution, and turbulent economy, have brought us to where we are now.”
Borders liquidating its remaining stores could bring the biggest changes into the book publishing industry. Because of Borders disappearance, the book selling scenery alter, driving writers to find other places to sell their work.[googlead tip=”patrat_mic” aliniat=”dreapta”]
Jennifer Romanello, executive director of publicity at Grand Central Publishing in New York who stopped sending writers to many Borders for book signings once they announced bankruptcy in February, claims she already seeks different locations to advertise their work.
“It’s one less outlet to use in promoting our authors,” she said. “There are still other things out there; we see if there’s an independent bookstore nearby. But the number of bookstores has been contracting, not expanding, so we’re selective where we send out authors.”
What are the financial analysts commenting on the Borders closing?
[googlead tip=”patrat_mic” aliniat=”stanga”]From Borders’ leaving will certainly benefit its competition, including Barnes & Noble and Books-A-Million, which might move into a lot of the store spaces left by Borders. Independent book shops that have fought for a long time the onslaught of superstores are enjoying too.
Barclays Capital analyst Alan Rifkin predicts the Barnes & Noble chain could gain $220 million to $330 million in revenue, or about 10% to 15% of Borders annual revenue.
Rifkin said even though Barnes & Noble has more aggressively and successfully pursued the e-book space than Borders did — with Barnes & Noble’s Nook e-reader and e-bookstore — it still faces the same stiff competition from online retailers.
“As the demand for physical books continues to decline, the need for big-box physical bookstores will likely continue to decline as well,” he wrote in a client note.
Adrian Sierra, 36, a realtor from Westchester, N.Y., for example, left Borders store in Penn Station in New York with no shopping bag stuffed with books. He was, on the other hand, holding his iPad.
“I’ll miss them,” he says, but, “I’m not going to buy another paperback in my life. There’s no reason to anymore.”
A growing number of customers like Sierra are the reason that Borders liquidation will most likely accelerate sales of e-books, said Forrester media analyst James McQuivey. He predicts e-book sales will nearly triple by 2015 to $2.18 billion, with the number of e-readers jumping from 10.3 million at the end of 2010 to 29.4 million by 2015.[googlead tip=”lista_mica” aliniat=”dreapta”]
The closings of Borders Stores, mentioned by Jon Steward in “The Daily Show” last night, are a loss for communities across the United States.
Mr. Edwards told Borders employees in a company memo:
“For decades, our stores have been destinations within our communities – places where people have sought knowledge, entertainment, and enlightenment and connected with others who share their passion.”