That’s sad to hear- they sold off their British stores a while ago (2007) and shut in 2009 in the UK.
I have worked for both BN and Borders and found the latter to be a much healthier, happier work environment. I left BN after I was removed from the schedule (though never told I was fired). My lock was cut off my locker and my things thrown out. No manager would take the time to even speak to me about what had been done.
Leaving Borders in 2003 was like leaving family. We were a happy little band of misfits and the management knew how to keep us happy. There was free coffee, deep, deep discounts, and at Christmas they’d bring someone in to do massages for us. The big change that came in right after I left was getting rid of the book info desk. Corporate said it encouraged staff to hang around too much. Then they moved in the toys. Previously, it had only been little, book-themed knick-knacks. Suddenly there were action figures, entire stationary and gift sections…the music section turning into a top 40 rack rather than those waist-high tables.
And by 2007 all the cool people were gone.
Does Borders no longer have their alliance with Amazon? There used to be some association there.
That’s weird. We avoid Barnes and Noble and Borders. We try to favor the smaller bookstores in Harvard Square and Porter Square. B&N and Borders used to be the ‘bad guys’ big box store muscling out the little independent shops, but now they seem to be the victim of a bigger Amazonian Fish. I agree that the pickings are slimmer in Boston though. Is Trident still around?
Sure, but that service gives me access to hundreds or thousands of niche bookstores–the kind of independent bookstores that Borders and Barnes & Noble was putting out of business–from the comfort of my home, without wasting time or fuel to go around to the few dozen small bookstores I could visit in a day. It also gives those sellers access to more customers without having to do their own marketing and distribution. Everybody wins but the big box sellers that haven’t figured out how to provide the customer what they want.
Mind you, I also try to support the good independent general bookstores. I’ll go to Vroman’s in Pasadena if they’re having a reading by an author I like, and I buy books there frequently for convenience and because their staff is actually knowledgable about their product. (I also note that when they have to look up information on a book, they open up a web browser and go to…wait for it…Amazon.com.) But I’m not going to pay a premium of 25% or more in general form just to keep a business that doesn’t provide any additional value to me. I realize that the collapse of these chain bookstores kind of sucks for the people who live in some backwoods hole or strip mall suburbia where they are one of the few centers of culture, but as has already been noted, they’ve failed to maintain that quality for a while now.
I kind of figured Borders was on a downhill slide when the one here in the new swanky shopping centre put up a wall decoration filled with text and the first thing I noticed was the phrase “… whatever your looking for …”
Personally I’ve always felt that Borders bookstores were too clean, almost clinical. I just don’t think of well-lit, wide aisles with books neatly shelved and piped in muzak when I think of a bookstore. I much prefer the little hole-in-the-wall with narrow aisles, piles of books everywhere, and eccentric atmosphere. But in my city there’s not much other than corporate bookstores around, so I made do. Still, our Borders was never busy, except at the coffee shop inside (a Gloria Jean’s, so I don’t even know if that brought much money to Borders itself), and it always seemed like the employees were surprised that I was in there to buy books. There were literally never any employees available to ask questions to while walking around in the huge, mostly-empty-space store – they were chained away behind the counter and I never saw one come out, if I asked them a question they’d just point in the general direction of the section I was after. Basically, it felt more like a book warehouse than a book store, y’know?
That’s more of a function of your city and its culture than the store itself, I think.
Here in Upstate I’ve always been astounded at how packed the B&N and Borders stores are. Always. Every day, any time of day. That’s probably because Rochester is always mentioned in lists of the highly educated and of book-readers. Ithaca is one of the great cultural oases in America. Buffalo continues to maintain independent new book stores, a rarity Upstate outside of college towns. Both Buffalo and Rochester have a good hundred thousand college students in their areas, which probably contributes, since many of them stay on. A concentration of college students seem to help.
I’ve gone into big box bookstores in other areas and seen what you describe. Some stores have the feeling and some don’t. You’d think they’d all be very similar but the variety is surprising.
Powell’s is still going strong. It’s filled not just with Portlanders, but with tourists. It’s the number one attraction in Portland. The street cars stop on both sides of it so it’s easy to get to without a car. They have now moved the technical book section across the street rather than a few blocks away. During the holidays they had about 20 cashiers working and still had lines. One sign of the times is that they now discount the best sellers, presumably to compete with Borders and such.
Yeah – I’d forgotten the Trident Bookstore and Cafe. One of the few remaining.
I’d love to shop the Harvard Square and Porter Square stores, except:
a.) most of them are gone. Seriously – Wordsworth’s, Asian Books, The Globe Travel Books, and many more, including a gazillion used bookstores. There’s only a [itiful few – the Coop (which is a college bookstore, after all), Harvard Books (which isn’t, despite the name), Harvard University Press bookstore, and a few specialty places selling manga and comics and the like.
b.) If you don’t live near public transit, it’s a serious pain to get to. Try parking in Harvard or Porter Square, even on weekends.
Up on the North Shore, Cornerstone Books in Salem has closed, leaving the extremely weird (and precariously-stacked) Derby Square bookstore and what you can find in the antique stores – in a city that used to be filled with bookshops. There’s a Borders in Swampscott and The Spirit of 76 in Marblehead, and B&N and Borders near Northshore and the B&N in Saugus. Plus a couple of Used Book Superstores. Most of the bookstores on the North Shore are simply gone.
I drove by B&N last Friday and the parking lot was PACKED, not a single space (this is a stand-alone store). But Borders (in da mall) was pretty empty, and I agree it’s going downhill. Though I always shop there before Christmas because they have a lot of ‘gifty’ things - cheap cookbooks like “5 Ingredients or Less”, books on knitting, books on pets…the kind of thing you give someone you don’t know all that well, but you know they’re in their first apartment or like to knit, or love cats. I get MY reading matter from the library, and as I have obscure interests, find ordering from Alibris or elsewhere on line much to my liking. Though I love browsing in Borders or B&N and ALWAYS buy something whether I need it or not! I suppose if I needed the latest hardcover from Tom Clancy or whatever I can go out and buy it (though it’s cheaper and more convenient to pick it up at Sam’s Club or even the grocery store), but if I want an old anthology of ‘Mutts’ Sunday strips, well, good luck with that. The bookstores do stock complete seasons of TV shows on DVD, including lesser known British series. But online this year I bought myself several lesser-known Hollywood musicals (yes, even a couple “used, like new”) for a small sum that simply aren’t available for purchase around here.
There used to be a huge, old used bookstore here, in an old warehouse, just the kind of place you eagerly search for buried treasure, and I did buy a LOT of books - hardcover editions of my favorite author, no more falling apart tiny print paperbacks! As time went on, though, I noticed there was no new stock coming in. Nothing changed, nothing moved, I saw the very same books there during every visit, in the same order, getting all dusty. Eventually this bookstore went out of business, very disappointing after that heady excitement the first few months.
Borders closed here. B&N moved into the mall, which is probably the best bet for them - they were getting no business, outside. But I too have switched to my Kindle and e-books. I miss the old ways, but it was a valid decision. Besides, both B&N and Borders have horrible sci-fi/fantasy selections - just all the newest, shiniest, or most popular.
Shift the sales to two levels - on-site sales and delivered. Increase the number of titles on the shelves dramatically and decrease the number of copies. If you have to have it today, you buy it at a small discount. If you can wait a day or two it will be delivered to you at a much greater discount. In this way, customers would be able to compare different titles. The physical Borders stores would become a showroom for Amazon.
The reason that Borders and B&N can’t compete with Amazon (well, one of the reasons*) is that Borders and B&N carry a huge physical inventory in their stores. This is expensive, and unprofitable.
Amazon, on the other hand, shifts much of that burden to their independent bookstore partners – the ones mentioned above who’re fulfilling orders of older, out-of-print books.
There is utterly no motivation for Amazon to assume the costs of those inventories. And they’ve ably demonstrated that they don’t need a showroom to have better sales than Borders or B&N.
another: Amazon e-mailed me yesterday to sell me the Complete Farscape DVD collection (~$130-150 at Borders or B&N)… for $49.99. B&N doesn’t even have a way for me to tag items I’m interested in; don’t know about Borders. And that price.
I hit the nearest bookstore, a big two-level B&N, for books from a wish list given to me only a couple days before Christmas. I had already checked a Waldenbooks (owned by Borders) and didn’t find what I was looking for.
It had the exact cookbooks my mom wanted (nothing too outlandish but one wasn’t that well-known), and the inspirational book that her boyfriend wanted - Waldenbooks only had its spinoffs. Plus there were plenty of John Steinbeck works that her BF hadn’t read or heard of, and which he really loved getting.
The big bookstores are my “want book now” sources. I hit smaller ones when I come across them. Here in Chicago, Powell’s has a great setup by getting a branch store in Midway Airport.
Amazon is for items that either I can wait for and I’m mail ordering other stuff anyway, or things that aren’t in stock around here.
And if I’m using my iPhone to scan a barcode using the Amazon app? I’m checking reviews. If I put it down, it’s almost always the case that the reviews don’t look good.
First, to get your bearings straight, here is what Borders operates.
A lot of time in these types of discussions people will throw out simple comments like how busy or not busy the store is or how can they compete with online retailers on price.
Those types of analyses sort of miss some of the big items. Clearly, operating online should be a lower margin, higher volume business than in a physical store. A company like Amazon should be able to sell many times more items, but making less per item than a company like Borders. The thought would be that a premium would be paid for being able to physically go in a store and sample the merchandise. That’s not the case, Amazon has a gross profit margin of 23.6% versus 17.2% for Borders. Gross profit margin is simply the profit after the cost of goods sold divided by the sales. This should’t be so, and suggests that something else is going on like the product mix is not really that similar or that Amazon not only sells for a cheaper price but is able to purchase for a significantly cheaper price. As Borders themselves say:
Why is online book sales a lower margin business for Borders but a higher margin business for Amazon?
Then we get to the real kicker, since Amazon is exclusively online, they have significantly cheaper G&A as a percentage of revenues. Amazon’s G&A was 1.5% of revenues while Borders was 27.6%. These are exact comparisons as Borders broadly groups multiple types of expenses in with G&A, but it really shows that their business model simply doesn’t work. The store costs and salaries they have to pay do not result in enough sales at a high enough margin, period. Clearly the question that needs to be asked is if they can reduce this expense significantly through layoffs, moving into less expensive leases, and other means without a significant further deterioration in the volume of their business.
Clearly this is a company that is in a major period of transition. As they themselves say:
Basically, they are experiencing a declining market share in a no-growth industry. Obviously that’s a horrible position to be in. As a result, they are in a shrinking mode.
Of particular note, we know they have delayed paying some of their vendors. This is particularly troubling for them as:
How likely do you think vendors are going to be to extend trade credit when Borders isn’t paying them back on time. The likelihood is that they are going to be required to post margin with some of their larger vendors, which they may be unable to do.
Now, I think they are doing some of the right things, but I just don’t know if it will help. Further, is a reorganization through bankruptcy really going to solve any of their problems? From my standpoint, it’s not simply an issue of onerous leases or too high of a debt load that is causing them problems. They simply are incapable of generating any operating profit. You could reduce their interest payments to nothing and they still lose significant money.
It’s worth saying that despite all of the moves they have done over the past couple of years, things are getting worse for them. For the first nine months of this fiscal year, they lost $185MM versus a loss of $169MM for the prior comparison period. They’re book equity is now -$40.8MM with their biggest debt being trade payables.
They seriously need to figure out what they make money on (may be small mall stores and internet) and lose everything else. Regardless, I think they will go bankrupt and we will see a significant reduction in the number of their large retail stores, not a simple reorganization or restructuring of the balance sheet.
Assuming that your mother lives near you, I suspect that she made up the wish list after browsing the same Barnes & Noble store. That’s the reason that you were able to find everything there.
This is true insofar as it goes, except for the fact that the big box stores don’t keep a widely varied inventory of even in-print books. For instance, I stopped at a Barnes & Noble recently to get some light travel reading material. Nothing terribly esoteric; I went looking for Picture This, The Little Sister, and a couple of lesser Vonnegut novels, all of which are currently in reprint, and I was prepared to pay full jacket price for trade editions, as the discount of ordering from Amazon was only a couple of bucks each. B&N didn’t have any of Joseph Heller’s books, it had one copy of Chandler’s The Big Sleep, and only a couple of the most common Vonnegut works. These are three of the most recognizable names in 20th century literature, and their stock of them was negligible. They did have a full display of Glenn Beck’s latest troglodyte musings at the entry of the store, though. :rolleyes: I went to the local independent, who hit three out of four, despite having half the floor space of Barnes & Noble. (I didn’t even bother going to the Borders, which is half-empty, not including the quarter of the first floor that is given over to overpriced sugary coffee-flavored products.) Guess where I’ll start next time I want to pick up some quick reading?
Barnes & Noble and Borders aren’t struggling just because Amazon is undercutting them and because of the cost of sustaining brick & mortar stores; they’ve struggling because they haven’t tuned their business model and inventory to their customer base. They’re trying to market to the bestseller crowd, who can just as easily pick up the same books at Costco or Target, and ignoring the desire for the larger body of literature and non-fiction.
The point about bankruptcy is that it would allow them to break those bad long-term leases. They have no more than 250 or so stores that would be long-term profitable. That’s what makes all the talk of buyers and deals so puzzling. They can’t survive without bankruptcy.
OTOH, I’m sure that people with hundreds of millions of dollars to toss around are much savvier about the market than I am. After all, they’ve proved that so many times in the past. :rolleyes:
I don’t see them being able to survive at all, I think they go the way of Circuit City. In fact, it seems the comparison between Best Buy/Circuit City and B&N/Borders might be very apt. B&N is actually acclimating itslef quite well to the new marketplace, it has captured about 20% of the ebook marketplace and has seen its in-store sales increase 5-10% year-over-year.
I think it’s even worse, actually. They deliberately made changes unpalatable to their main customer base, and to the image they’d been marketing.
Both Borders and B&N started off selling themselves as places to come in, browse, sit and read, etc. That’s why they have cafes and had all those chairs around. They were selling toward browsers and impulse buyers.
But a few years back they cut back on their physical inventory, drastically. Both Borders and B&N basically eliminated about half of their bookshelves in all their stores. The local Borders even rearranged the shelving at angles, so they wouldn’t seem so empty. And they got rid of quite a few of the comfy reading chairs.
So, they basically tossed out their selling points, to save on their inventory costs. It’s a bit like Chuck-E-Cheeze getting rid of the games, but expecting people to keep coming for their great pizza.
I wonder, though, if that growth for B&N is sustainable: how many of those people who bought Nooks are going to come back to a B&M B&N to purchase an ebook rather than opting to simply download it from their chair at home or work? Granted, my knowledge of ebooks is negligible, but I’m assuming that a Nook user would be able to download new content from say, Amazon, rather than B&N’s Web site.
The B&N close to my place of work looks much like the one **Lightray **describes in the post above: the store has cleared out many of the bookshelves and has replaced it with tables devoted to selling Nooks. Unless they’re planning on people buying new Nooks every two or three years, that doesn’t seem like a very sustainable business plan.
