Tag Archives: bankruptcy

The end of a bookseller

As predicted, Borders will soon liquidate its remaining stores, leaving almost 12,000 men and women without jobs.  The bookseller will leave behind millions of dollars in debt still owed, much of it to publishers.  Landlords will be left with unfulfilled leases.  The financial impact on the cities where the stores are located will remain to be seen, but the loss of tax dollars these days is never a good thing.

Now, there is still a very small possibility that the bankruptcy court won’t approve Border’s plan to liquidate the remaining stores.  But, in my opinion, my chances of winning the lottery are greater than the court not approving the liquidation motion.

Mike Edwards, CEO of Borders, sent a letter to the bookseller’s employees yesterday explaining what is happening.  He admits that they have been facing “headwinds” for more than a little while now.  These difficulties, according to him, include the economic downturn, e-books and a rapidly changing publishing industry.  All of which is true.  But what he doesn’t address — and I probably shouldn’t fault him for it.  No one likes to focus on their own shortcomings — is how mismanagement and a failure to adapt to the changes in the industry also played a large part in the fall of the once might bookstore chain.

I’ve written previously on why I think Borders has found itself facing the inevitable.  I don’t want to rehash all that.  No, what we have to do know is figure out how this will affect the publishing industry as a whole and how we — writers, publishers and retailers — will be able to step in and fill the void left by Borders’ closing.  Can that void be filled?

In my opinion, the day of the big box store is over.  Barnes & Noble and some of the other chain may survive.  But they are going to have to continue adapting to changes in the market and consumer demands.  Does the closure of Borders herald the end of the print book?  No.  At least not for a long time.  Nor does it signal the end of bookstores.  Despite the cries of the doomsayers, e-books still hold too small a percentage of the market to kill off the printed book.   Nor does the continued success of Amazon mean bookstores are doomed.

What I think we will see are more specialty stores.  Smaller venues catering to customers looking for a specific kind of book.  These will very likely become boutique-type of stores.  Think books and wine bar or upscale coffee shop.  Atmosphere will play a part in the success of the shop.  But, more importantly, customer service and employee knowledge of the stock will be key.  Just like it used to be in the local bookstores before they were driven out of the market by the big box stores.

What’s that you say?  That those stores have been proven not to work because they were run out of the market when B&N and Borders and other “superstores” came into the area.  Of course they were.  Because we, the consumer, were blinded by the bright lights and huge selection those new stores offered.  Those stores could buy in larger quantities than the locally owned stores could, so they could sell books at a lower price. Something else we liked.  But where does that leave us now?

Think about it.  With Borders gone, especially if you live in a major metropolitan area, where is the closest bookstore?  Two years ago, there were at least eight major bookstores — and probably more likely a dozen.  It’s too early to figure it out exactly — within thirty minutes of my house.  Now, once Borders liquidates the last of it stores, there will be less than half that many.  The closest is ten minutes from my house.  Not that far but it’s located across from the mall where traffic is horrid at the best of times and parking is a pain.  In other words, not someplace I go unless I absolutely have to.

Now, if someone were to open a specialty shop up in the area, one that specialized in mystery or science fiction/fantasy and made it an inviting place to shop, I’d be there in a flash.  It would be worth waiting a few days and paying a bit more to have a bookstore that catered to my wants and interests.  But, whoever opened that store would have to do so with enough reserve capital to operate for at least two years before posting a profit.  That’s just common business sense — something that is often lacking these days in both small and large business ventures.

But there is something else we, as writers and publishers, have to be worried about with Borders closing.  There has been a lot written about how the loss of approximately 400 stores will mean there will be even less of an opportunity for new authors to be discovered.  That might be true, but that’s been the case for a long time.  No, the real impact is going to be on the mid-list writer.  These are the workhorses of the publishing world, and all too often the unsung heroes.  These are the writers who can be relied upon by publishers to deliver several books a year that will sell a certain level of books — or more — each time because they have a solid fan base.  It might not be huge by best seller standards, but it is there and these fans can be counted on to buy and talk about that author’s titles.

Unfortunately, it is the midlister who has been getting the short end for awhile now.  That will only get worse as publishers scramble to find ways to recover from the financial hit they will take with Borders’ liquidation.  Remember, at the time Borders filed for bankruptcy, it owed publishers close more than $190 million.  In the five months since that filing, you know that amount hasn’t been decreased by much.  Add to that the amount that will be owed to those publishers who agreed to ship stock to Borders without payment on delivery.  That financial hit is going to have to be dealt with somewhere and, unfortunately, I’m afraid it will be midlisters and readers who suffer the most.

So, the best thing we can all do is support your favorite author by buying their books and telling your friends about them.  Word of mouth is the best promotion there is.  If you are lucky enough to have a locally owned bookstore, support it.  Amazon and other online retailers are great, but not for everything.  You don’t get that special attention from them you get from a well-versed, fun to talk to bookseller.  The demise of Borders is not indisputable proof that bookstores are dead.  But it can be the tip of the iceberg if the industry doesn’t learn and if we, as consumers, don’t support the local indie stores.

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Alas, poor Borders, we will miss you

I grew up in a household where the book was valued, not only as a form of entertainment but as a friend.  A book was something that could transport you to faraway lands and worlds.  A book could teach you things you’d never learn in a classroom.  The author was respected for the work they did, even if you didn’t always agree with what they said.  After all, back in the days of Remington portable typewriters and IBM Selectrics, you knew how dedicated they had to be just to write the book.

But it went beyond that.  Books were affordable then, even taking into account inflation, rising prices, etc.  Publishers at least seemed to be better gatekeepers and they promoted books.  Newspapers had book review sections that were sections and not just a page or two in the entertainment section of the Sunday paper and they were filled with reviews not only from syndicated reviewers but local reviewers as well.

Something happened as I grew up.  Part of it was, I’m sure, the fact that I did grow up and I started looking at the world through slightly — okay occasionally very — jaded eyes.  Part of it was also the changing in economics and demands by big box booksellers that publishers change the way they dealt with bookstores.  And then, of course, there were the big box booksellers themselves.  They came in and pushed the smaller indie bookstores out of business.  Those small stores simply couldn’t negotiate the same deals with publishers that the big box stores could.

I was like so many back then, entranced by the larger selection of books.  Enthralled because I could buy my music at the same time I bought my reading material.  Then they brought in coffee shops.  Oh my, I’d died and gone to reader heaven.  Coffee and books!

But, like so many business ventures that look to be initially very successful, these big box booksellers made mistake after mistake.  They over-expanded.  Every mall had either a Barnes & Noble or a Borders (or similar big bookstore).  Almost always, you’d find their competition opening a store within a mile or two radius.  While there might not have been a bookstore on every corner, they saturated the market and still kept building.

Then there’s the change in how they ordered titles for each store.  Initially, store managers and district managers were allowed to decide which titles to stock.  Sure, the “best sellers” were stocked nationwide, as were titles where the publishers purchased endcaps etc.  But the stores were allowed to also buy based on their market.  So, if I walked into a Borders or B&N in Dallas and then took a jet and look at the same store in Boston, I’d find a different selection.  Why?  Because interests and buying patterns vary from region to region.

But just as some marketing guru has told grocery stores to put in long aisles with no middle break, someone told bookstores that they could save money and sell more books by changing their buying patterns.  Local buying control was moved to regional and then to national.  Not only that, but bookstores were suddenly being told to remove titles from their shelves based not on how well that title is moving in the store or locally but based on how it is moving nationally.  So, a book that could build a large following if left on the shelves long enough for word of mouth to build is removed after a week or two simply because it didn’t reach a certain level of sales determined by some bean counter in an office well removed from the sales floor.

A lot of stores also moved away from manning their staff with full-time employees to a roster of mainly part-time employees.  It saved the company money by going that route because they didn’t have to pay as much in benefits, etc.  But it all too often also led to a decline in customer service.  I’ll never forget the day I went into a Border superstore across the street from my son’s high school.  I wanted my coffee and book — remember, I’m a caffeine addicted book addicted writer — and was sure they’d have both.  Well, they had the coffee.  But they didn’t have the book, which happened to be the latest by David Weber.  DW is a best selling science fiction writer.  The book was new.  Baen is not some new, never heard of publisher.  So I checked the shelves.  Nothing.  I went to the new release table.  Nothing. I found, after some searching, an employee.  He’d never heard of the book or of DW, but he’d check their system.  Nope.  No book.  Did I want to order it?  Sure.

That’s when I fell down the rabbit hole and I’m not sure I ever climbed out.  He couldn’t order the book for me because their system didn’t recognize it as a legitimate title.  Five minutes later, the manager appears.  Nope, can’t order it.  Their system doesn’t recognize Baen as a legitimate publisher.  Never heard of Simon & Schuster, Baen’s distributor.  The manager only gets upset when I go to the stacks and produce DW’s previous books — almost all of them.  No, they won’t call anyone for help.  If I’m not happy, I can leave.

No, I haven’t fallen down the rabbit hole, I’m in the Twilight Zone.  I’ve been thrown out of a bookstore because — gasp — I wanted to order a book.

Then came e-books and, in the following years, viable and affordable e-book readers or reliable free e-reader programs for our computers, smart phones, etc.  Amazon, already seen as the bane of all things bookstore, brings out the Kindle.  Barnes & Noble follows, later than they should but at least they followed, with the Nook.  Borders played pretty much the same hand it did when it first tried to have an online presence.  The first time I tried to order a book online from Borders imagine how surprised I was when I was redirected to Amazon.  One one hand, Borders had been crying foul because Amazon was selling titles lower than anyone else.  On the other, they are using Amazon as their online store.  HUH?  Finally, after who knows how large a loss, Borders pulled out of that agreement and, for awhile, they had no online presence at all.  Then, finally, they were back and selling their own stock.

Enter e-books and the sound of crickets.  Because that was all you’d get for a long time if you wanted to buy an e-book from Borders.  They never came out with their own e-reader, instead opting to promote and sell other vendors’ readers in their stores.  If you bought an e-book from Borders, you were buying it from KOBO.  Again, too little, too late, especially when you have upper management making like ostriches and burying their heads in the sand.

Now Borders is facing, as I predicted months ago, having to auction off all their assets.  Their stalking horse bid has withdrawn the last I heard.  The deadline for a sale of the company, in whole or in part, is today.  The last I read about the process was that the liquidators have been named as the new stalking horse.  If this is the case and if nothing happens to change things, we will soon be without Borders Books.  As much as I’ve hated what the company has done, I still have fond memories of the stores when they first opened.  I still believe fervently in the importance of having bookstores.  I’d much rather pay a little more for a book that I can buy locally.  It helps the local economy for one.  But there is still something about going into a store and browsing the titles, finding a book I might not have heard about and flipping through it.  I’ve bought so many books, and found so many new authors to follow, by doing that.  It’s not something you can do with Amazon or Google books, etc.

I’m going to put on my rose colored glasses and hope something happens to save some, if not all, of the stores.  I want that for the employees and their families and I want it for folks like myself who still enjoy the bookstore experience.  But it will only work if the new owners learn from the past and do all they can not to repeat the mistakes made by Borders’ management.

If Borders is forced into liquidation, hopefully their fate will be a warning for other bookstores, especially the chains.  I do not want to see bookstores disappear any more than I want to see physical books disappear.

Cross posted to Mad Genius Club

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Borders CEO Speaks

Approximately three months have passed since Borders filed for bankruptcy.  In that time, we’ve seen the bookseller announce the closure of more than 200 stores.  Other stores are figuratively holding their breath as they wait to see if the axe will fall on them.  Booksellers and other vendors suspended deliveries to Borders for a time before going to a cash only business.  I’ve shaken my head as reports came in that, amid all the closures and employees losing their jobs, Borders wanted to pay their senior execs millions in bonuses.  And still there has been no business plan released to the court or creditors and no reorganization plan pulled together.

What more could happen to drive my sense of disbelief higher?

Simple, the CEO of Borders, Mike Edwards, could give another interview.

The article starts by noting that Edwards, while optimistic that Borders will successfully emerge from bankruptcy, is placing the burden on publishers.  Without publishers agreeing to new terms under which they will ship books to Borders, the company will fail.  While he doesn’t say it, I can’t help but wonder if these new terms are actually the old ones — deliver books to us without us having to pay for them.  Trust us, we’ll pay you sometime down the road.  Trust us, we’re your friend.

February 16th saw Borders filing for bankruptcy.  Since then it has closed — or announced upcoming closures — of approximately 230 stores.  As the article says, Borders “continues to bleed cash” to the tune of a $52.6 million loss from January 1 – March 26.

My disbelief at Edwards’ disconnect grew when he commented about his disappointment at how the Ann Arbor community hasn’t rallied around to support Borders.  A community already hard hit by the struggling economy, a community that had been so proud of its ties with Borders until the company morphed into something the founders probably could never have imagined, and he is disappointed it hadn’t rallied around to support it.  I have friends in the area who probably asked themselves what Borders had done to help the community in recent years.

And let’s not forget that in the same metaphorical breath, Edwards said that Borders corporate HQ could be leaving Ann Arbor.  That’s really giving them a reason to support the troubled company, isn’t it?

I guess what baffles me the most is Edwards’ attitude that publishers, vendors, landlords and employees must make concessions to save his company.  He wants publishers and vendors to forget the past non-payments and start supplying him with products on a wink and a handshake.  He wants landlords to redo lease terms to lower Borders’ payments.  Employees by the thousands have lost their jobs.  The ripple effect of all this goes into each community — and he doesn’t seem to want to consider this.

I guess that’s why I’m not impressed when he responds to a question about executive bonuses by saying these probably won’t be paid.  In other words, he doesn’t think they can meet the goals required for the bonuses to kick in.  If they can’t meet these goals, is there any real chance Borders can come out of bankruptcy?

Oh yeah, these goals also hinge on concessions from landlords, creditors, etc.

Edwards did say in the interview that Borders has come up with a business plan it will be sharing with publishers in the coming days.  This plan includes terms Edwards described as a “shared risk scenario”.  Am I the only one who sees big problems with publishers taking on any more risks right now?  Especially with the rumbling storm off their metaphorical coast as authors start looking more closely at their sales figures and royalty reports?

Another indication that Borders refused to see the writing on the wall and then, when the wall smacked them in the face still wanted to put the responsibility on others is the comment from Edwards that they only reason they closed the almost 230 stores is because publishers wouldn’t agree to concession in January.  If these concessions had been agreed to then, only 110 stores would have been closed.

Maybe I’m slow here, but Borders initially announced that these stores were closed because they weren’t profitable.  Is Edwards saying he’d have kept unprofitable stores open — and continue an even larger cash bleed than it is experiencing now — if publishers had agreed to continue supplying books without payment?  The mind boggles.

Then comes his disconnect, or at least putting on of blinders, about the future of e-books.  He notes that, when he joined Borders a year and a half ago, e-book sales were approximately 1% of the market.  According to him, at that time the Kindle didn’t have “any traction”.  And he is oh so surprised by the increasing popularity of e-books and the increase in their sales numbers.

I’m sorry.  All he had to do was look at the sales figures for the last ten years.  They’re available.  A simple google search will find them.  If he didn’t want to do that, just look at what was happening from his competitors at the time.  Amazon had brought out the Kindle 2 by then.  The Nook was coming out.  Sony had a dedicated e-reader.  Baen Books had been successfully publishing and marketing e-books for years, as had other publishers.

Edwards is disappointed publishers haven’t been more supportive of them during these first few months of bankruptcy.  But there is one word he uses that everyone should note and remember — especially if you happen to be one of the publishers he’s asking for concessions from.  According to Edwards, “If all the pieces have to come together, the terms commitment then drives the financial sponsorship.”  Note the last word — sponsorship.  That really is the crux of what they are wanting.  They want publishers — who are facing their own financial crises right now — and other vendors to SPONSOR their debt.

After reading this interview, my confidence in Borders is even lower than it had been and that saddens me.  I love bookstores.  I think they are a vital part of a community.  But this sense of entitlement, of trying to put the responsibility on others instead of where it belongs bothers me a great deal.  Unfortunately, it doesn’t surprise me from a corporation that has shown more concern about rewarding execs who didn’t read the writing on the wall, or who at least ignored it, than about the employees who have suffered as a result.

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Borders execs to get bonuses

Last Friday I wrote about Borders wanting another $50 million in financing, even though it has yet to file a new operating/reorganization plan with the bankruptcy court.  Well, on the heels of that news came news that the bankruptcy court has approved a “modified” bonus plan for some of the bankrupt bookseller’s top execs.  Yes, the same company that couldn’t see the writing on the wall and act before being forced into bankruptcy is going to reward its executives for doing a good job.

Okay, to be fair, this is a smaller bonus package than the one originally requested by Borders.  Several execs are now left out of the plan and the bonuses are tied more closely to how much money the company saves and manages to pay back to its creditors.  Still, color me skeptical, especially since there is still no plan for future operations on file with the bankruptcy court — at least not one that I’m aware of.

Borders had argued such a plan was necessary to keep its senior executives on board during the reorganization.  According to this article in the Detroit News, some corporate employees had left — 47 according to the article.  These departures had created a “leadership crisis” Borders alleged.  I can’t help but wonder if there wasn’t a “leadership crisis” at Borders that led up to the bankruptcy filing and that losing some of the flotsam might not actually help.  However, that said, I do recognize the need of any company to maintain a viable executive workforce in order for the company to function on a daily basis.

Flash forward to this past Friday.  Saying the latest bonus plan is “in the best interest of the debtors, their estates and creditors,” bankruptcy court Judge Martin Glenn approved the plan.  For 10 lucky executives, the bonuses will range from 40% – 125% of their base salary.  The amount will depend on how much money is saved by the company as it tries to come out of bankruptcy.  For the lower bonus to kick in, the company must have at least $10 million in lease renegotiation savings.  For the higher bonuses to kick in, they must recover in excess of $95 million for their unsecured creditors.

It is important to note that the bankruptcy trustee still argued that the bonuses were premature.  Borders has been in bankruptcy only two months and has yet to file a reorganization plan with the court.  So, to me at least, it appears like a case of putting the cart before the horse and that, unfortunately, seems to be the same old operating model that put Borders in the precarious position it now finds itself in.

I’ll be honest, I have grave concerns about how they are going to reach the lease figures necessary to meet the bonus levels.  To begin with, Borders said not too long ago that it was looking at closing even more stores — stores that were not on its initial closure listings.  To date, it has closed approximately 1/3 of its stores.  There comes a point where there aren’t enough stores left to cover the debt.  And, as was noted in last week’s post, one of the reasons Borders is looking for another $50 million is because it isn’t making as much in sales at it expected and because — gasp — its suppliers are insisting on payment before turning over stock to them.

How do you increase sales when you are continually decreasing your sales outlets?  I know Borders says part of what they want to do is increase their e-book presence.  Well, so far, I’m not impressed.  I looked up approximately a dozen titles in their e-book store yesterday and not a one was available.  These were titles from major publishers and authors.  And they weren’t there.  It’s hard to be taken seriously as an e-tailer when you don’t have what your customers are looking for.

I’d feel a lot better about the judge’s ruling if we knew Borders had a clue yet about what got them where they are and about how to get out of this mess.  Unfortunately, we don’t and that is what the trustee was saying.  Is it time to give up on Borders?  Not yet.  But I do hope the publishers and other vendors supplying Borders with stock continue to protect themselves because I’m not optimistic about its chances for emerging from bankruptcy, much less that it will emerge from bankruptcy and thrive.

–Amanda

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Borders, E-Books Sales and More

Before we get started with the weekly “news”, I have to give a shout out to Shiny Book Review and say “thanks” for the wonderful review of the e-arc of Dave Freer’s middle grade/early ya novella, Without a Trace.  You can check out the review here.  The final version of Without a Trace will be available shortly from NRP.

Now to the latest news from the industry front.  We may as well start with Borders.  I have to say, I’m thrilled to see that the bankruptcy judge is not just rolling over and letting Borders do as it wants.  Instead of approving the bonuses Borders wanted to pay its executives, bankruptcy court judge Martin Glenn said the Borders lawyers needed to negotiate with the U. S. Trustee to figure out something different from what had been proposed.  I applaud the judge for remembering the workers in the trenches at Borders, those who have given so much, often for a number of years, with little consideration from upper management of late.  “If this business goes down the toilet bowl, there are a lot of full or part-time employees who face the prospect of going out of work,” Glenn said.

The U. S. Trustee also deserves a pat on the back for realizing that these bonuses are premature at best, especially considering the fact that Borders has yet to show to the court — or its employees — how it will reorganize or pay its creditors.

But that’s not all the news concerning Borders this week.  According to CoStar, Borders has begun filing papers with the bankruptcy court to amend or cancel a number of its leases.  Let’s remember that Borders already has received approval from the bankruptcy court to close 226 stores.  In the last three weeks, it has filed papers seeking approval to cancel another 12 leases.  It is generally accepted that Borders will seek to cancel the leases on approximately 50 stores above and beyond the 226 already slated for closure.  Seems to me like the numbers of store closings continues to increase.  Is it any wonder why the U. S. Trustee and the bankruptcy judge felt the proposed payment of millions in bonuses to the execs was premature?

For a list of properties Borders is requesting lease terminations on, check pages 11 – 12 here.

In a follow-up to the announcement by Amazon that it would be closing its Irving, TX distribution center, so far, that hasn’t come to pass.  There are several bills before the Texas legislature that might entice Amazon to stay.  For more information, check out this article from the Austin Statesman.

On the e-book sales front, AAP (Association of American Publishers) has announced the February sales numbers.  At first glance, things don’t look so good.  There was an overall decrease in sales to the tune of 10.6% (a 5% fall for the year to date).  Here is how it breaks down, according to Shelf Awareness.  Note the huge increase in e-book sales.

CATEGORY SALES % CHANGE 
E-books $90.3 million 202.3%
Downloadable audiobooks  $6.9 million  36.7%
Religious books $48.9 million   5.5%
Professional $42.9 million  -3.6%
Univ. press paperback  $3.2 million  -5.5%
Children’s/YA hardcover $32.4 million  -6.1%
Univ. press hardcovers  $3.5 million  -6.5%
Adult paperback $81.2 million -24.6%
Children’s/YA paperback $26.1 million -25.9%
Audiobooks  $5.9 million -33.2%
Adult mass market $29.3 million -41.5%
Higher education $24.9 million -42.9%
Adult hardcover $46.2 million -43%

Finally, don’t forget to check out our two newest titles:  Want by Jay Caselberg and Skipping Stones by Darwin Garrison.

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Monday Morning Thoughts

I hope everyone had a great weekend.  But now it’s time to get back to work — at least for me.  So, to start the week off, here are a few links that might be of interest.  And, of course, there is an update on the Borders situation.

There is an interesting article in the Washington Post about how the publishing industry needs to take a page from the music industry and get rid of DRM.  I have to agree.  We didn’t see the music industry end when they finally did away with DRM and settled on a generally recognized format.  Did it change the industry?  Sure.  But that would have happened anyway simply because of new technology and demand from the buying public.

As a consumer, I’d love to be able to buy any e-book without DRM.  It wouldn’t even matter if the e-books were offered in different formats.  With no DRM applied, it is easy to convert from EPUB to MOBI to LIT or LRF, etc.  It would allow me to move an e-book from my kindle to my iPod touch to whatever.  That way, if I happened to be going somewhere and didn’t want to take my kindle with me, I could at least continue reading my e-book on my iPod touch, which certainly fits into smaller purses — or pockets — than the kindle does.

As an editor, I wholeheartedly agree that DRM needs to go away.  Oh, I can hear the screams of anguish now about how that would lead to an increase in piracy.  Sorry, but I don’t buy it.  If e-titles are easily available, the demand for pirated copies will decrease.   I’ll lay odds on it.

For those of you who might not follow the kindle boards over at amazon.com, there’s an interesting discussion going on about why e-books cost so much.  Now, you do have to wade through the grouchy responses about the agency model and others who won’t pay more then X-amount for an e-book.  But one response in particular caught my eye this morning.  This particular poster simply responded that e-books cost so much because they are still books.

I have to agree with him to an extent.  In particular, I do believe an e-book is no less a book than a hard cover is.  However, there are differences in the cost of production, distribution, etc.  And those cost differences should be passed on to the reader.  Pricing an e-book at the same — or higher — price than a hard cover will come back to bite the publisher on the butt.  (And hurt the author at the same time.  See the comments and posts about Michael Connelly’s The Fifth Witness last week when the digital version cost more than the hard cover versions at both Amazon and B&N.  Since then, the publisher has lowered the price of the e-book by $2, making it less expensive than the hard cover version.)

Finally, our Monday morning update on the Borders bankruptcy proceedings.  According to Publishers Weekly, the figure for unsecured creditor claims is in excess of $500 million.  That thud you heard was my jaw dropping to the ground.

Borders also argued for — and was granted — the ability to continue its contract with an outsourced call center.  The figures for this are in the article.  Go take a look.

In fact, just go read the article.  There’s a lot of information in it, much of it that still has me shaking my head.  The one thing it does include is the fact that the U. S. Trustee filed an objection to Borders’ request to pay its execs bonuses.  To say such plans are premature has to be the understatement of the year so far.

On the NRP front, we will have two new titles out Wednesday.  Check back for more on that later.

–Amanda

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Borders Strikes Again

Just when I thought I’d seen it all where Borders is concerned, I discover I’m wrong.  Mind you, I’m often wrong, so that’s nothing new.  But the audacity of this latest move by the beleaguered bookseller has me wondering just what their top execs are on.

Specifically, I’m referring to this article from the Wall Street Journal.  In papers filed with the bankruptcy court, Borders is asking for permission to pay their execs bonuses.  Yep, you heard right, they want to reward their execs.  Those same execs who helped lead them into bankruptcy.

But it gets worse.  We aren’t talking token bonuses.  We’re talking a total amount that could add up to something in the neighborhood of more than $8 million, including a bonus for their president, Mike Edwards, in the range of $1.7 million.

So, let’s see, they want to reward these suits — I’ll grant some of them have only been with the company a short time, but they still did not take strong enough steps to save the company from bankruptcy.  And, judging by other news in the above-referenced article, they haven’t gotten any better.  They have just announced that the distribution center they announced several months ago would be closing isn’t.  They’ve called King’s X and have decided to close another distribution center.  Sounds to me that they still don’t have a clue about what’s going on.

The justification put forth by Borders is that they need to pay these bonuses to keep the execs in place during the reorganization.  It would, according to one of the unsecured creditors, cost more to replace them.  If that’s the case, then is there any sense in trying to save the company?  If these execs aren’t willing to hang in there — if they don’t believe the company will survive bankruptcy and that they’d have a job on the other side — then why the farce?

Yes, farce.  They show no hesitation to mess with people’s lives by closing stores and cutting jobs — including stores that were making profits.  Or worse, by telling people they were losing their jobs, so go find another one only to say King’s X later.  Yet they don’t bat an eye to ask for additional reward for a job poorly done.

As much as I hate to see any bookstore close, I’m fast losing hope that Borders will survive for long.  Even if it manages to come out of bankruptcy, this sort of action will eventually kill it.  In the meantime, it is hurting a lot of employees and turning the public even further against it.

–Amanda

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