Some Final — Hopefully — Thoughts on the Borders Bankruptcy

As the title of this post states, I’m hoping things settle down and the Borders bankruptcy moves out of the “breaking news” category.  Do I think it will?  Not for a while.  Why?  Because even now, Borders continues to shoot itself in the foot.  While I wasn’t surprised to find the email this morning proclaiming the fact that my local Borders is closing, it did surprise me to see they have already decided not to accept checks.  C’mon.  The stores aren’t slated for final closure for 4 – 6 weeks.  Most checks are instantly debited from an account — or are at the end of the day.  Oh, to add insult to injury here, this was in the fine print at the bottom of the ad.  Anyone want to take a bet that there are a number of people who will make their selections and get to the checkout stand only to be turned away?

But that’s not the worst of it.  Not by a long shot.  It seems that even though Borders told the court in its bankruptcy filing that letting it skip the 21 day waiting period for liquidation of the 200 stores, etc., would allow it to do things like meet payroll, it failed its employees big time.  Apparently a number of employees discovered that their last paychecks went BOUNCE!

Yep, that’s right.  At a time when Borders should be doing everything it can to keep employee morale up, it shot it down even more than it already was.  Oh, after the calls started coming in from upset employees and store managers, Borders apologized and told everyone what to do to get a new check issued or to get a cash advance from their managers.  Sorry, but I wouldn’t hold a lot of stock in those checks clearing either — at least not in a timely manner.   Frankly, reading some of the comments to the post, it is clear that Borders has failed miserably in communicating anything with their employees since announcing they were filing for bankruptcy.

As I read the comments to the LJ post linked above, as well as the editorials and news articles that have come across my desk the last few days, I can’t help but shake my head.  Borders has, over the last five years, done a remarkable imitation of the ostrich with its head in the sand.  It failed to read the changes in the market.  More importantly, it failed to take action when it quit posting profits.  They obviously followed the philosophy of “If you build it, they will come.”  Unfortunately, that only works in movies and at new Crispy Creme shops.

When Borders first entered the market on a national level, they were cutting edge.  They offered a wider selection of books at a lower price from what the local indie bookstores could offer.  Their employees were knowledgeable and excited about their jobs.  Borders became a one-stop store for both books and music.  Then they added the coffee shops and comfortable seating throughout the store.  What more could a reader as for?

Well, you could ask that the above continued and it didn’t.  As Borders expanded more and more, employee turnover levels increased.  With that came more part-time employees who didn’t know the stock, nor did they know the industry.  If you read insider reports, it becomes clear employees weren’t adequately trained in a lot of instances and the emphasis was shifted from selling books to selling the reward program.

Then Borders shifted away from allowing local stores or districts to do their own ordering to regional and national ordering.  That is a fundamental flaw in the system.  Doing that is like having all grocery stores stock the same food items, no matter where they are located.  Sorry, Borders, but tastes vary from neighborhood to neighborhood, region to region.

The last time I was in one of the stores they are leaving open — and it still amazes me that this store is remaining open while my local store, one that was posting profits for the company, is closing — it was like stepping into an almost empty warehouse.  A quick check showed they had removed about half the shelving in the store.  That is a huge decrease in the number of titles available to their customers.  More non-book items were also present.  Add in a belligerent store manager who tried to throw my son out — my then 17 year old son who was standing at my side, having a conversation with me about a book we’d come to buy — because it was finals time at the high school across the street and they weren’t letting students in until after school regularly let out.  He didn’t care that my son wasn’t in school that day, nor that he was there with me.  Nor was this so-called policy posted anywhere.  Needless to say, that was the last time I entered that store.  Of course, this is the same store where the same manager had no idea who or what Simon & Schuster was nor could he figure out how to order a book for me because it wasn’t in stock.

But what really gets to me is the blame being heaped on the increase in e-book sales as being the final nail in Borders coffin.  Sorry, but according to AAP, e-book sales make up a grand total of 8.32% of the market.  8.32%.  Yes, it is the only aspect of the market, aside from downloadable audio, that is increasing in sales on a regular and rapid basis.  But it is still a very minor portion of the market.  For that to push Borders over the edge means there was major trouble before, trouble Borders either refused to admit existed or they simply didn’t realize it existed. Either way, it doesn’t bode well for the company’s survival.

Is this the end of the big chain bookstores?  I don’t think so.  For one, Barnes & Noble hasn’t made all the mistakes Borders did and I can pretty much guarantee you they are scrambling to make sure they don’t go the same route.  Books-A-Million is reportedly looking at some of the locations Borders will be vacating.  So they are looking at expanding their store numbers.  Let’s hope they don’t get too ambitious.

Will this see a resurgence in indie booksellers.  Personally, I hope so.  If the indies grab hold of niche markets in the areas where Borders is closing stores, they have a chance to not only survive but thrive.  This is especially true if the indies in an area work together to offer some of the services and community outreach programs Borders once did.

Now, for those of you who will be losing your local Borders, here’s a list of some of the indie bookstores.  Hopefully, you’ll find one or more in your area.

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4 Comments

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4 responses to “Some Final — Hopefully — Thoughts on the Borders Bankruptcy

  1. What I wouldn’t give to see a good indie store within reach of me. The big box borders in the nearest city is on the list, although the mall store 20 minutes away isn’t – it’s one of the “was a Waldenbooks” ones. That’s what I get for living in an itty bitty town, I guess.

    • Kate, I wish I could be optimistic for the mall store, but I’m not. Before they filed for bankruptcy, it’s my understanding that Borders was going to close the mall stores. We also need to remember there are another 75 stores slated for possible closure while they are in bankruptcy and those stores, to my knowledge, have yet to be named.

  2. Comments on Borders’ business practices aside, it’s not uncommon in bankruptcy sales to refuse to take cheques. Some insist on cash only, for a variety of reasons, one assumes the primary reason is maximizing what profit there is on the sale (credit card firms charge between 3% to 10% of the sale as a fee, American Express being at the high end).

    If the electronic clearing at point-of-sale isn’t done, then the seller is open to charges for returned cheques. Many times these sales are handled by a third party.

    • Oh, I recognize that fact. It’s just unusual for it to go into effect this soon…especially since most stores down here do seem to have the POS electronic clearing. But even that isn’t what got to me…it was the fine print at the bottom of the ad and the fact that, after I posted this, I did get confirmation from friends who did go to several of the stores that notice wasn’t prominently displayed and they saw folks going away without buying anything because of it.

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