There’s bad news for readers (particularly those who travel and love to find a big bookstore) and authors: Borders, the country’s second largest bookstore, is filing for bankruptcy protection and is closing 200 stores — 30 percent of its total.
It’s the victim of a changing market (in books and how people buy them) and technology (in how some readers now read them). And — like the case of a daily newspaper in trouble — iit’s a sign of how the bookstore industry itself is going to have to rethink it’s business model.
Borders Group, the bookstore chain whose rise helped crush scores of independent booksellers, filed for Chapter 11 bankruptcy reorganization Wednesday, announcing the closing of 200 stores, including eight in the Washington area.
The company, founded in Ann Arbor, Mich., in 1971 by brothers Tom and Louis Borders, is struggling under more than $1 billion in debt amid rapid changes in how Americans buy and read books. In: e-books, downloaded whenever, wherever. Out: People shopping at chain bookstores.
Although expected for weeks, the bankruptcy filing shook shoppers, publishing executives and even competitors.
“This is the biggest bankruptcy in the history of the book business,” said Albert Greco, senior researcher at the Institute for Publishing Research in New York. “This is really a depressing day.”
As part of its effort to erase debt and emerge from bankruptcy as a viable retailer, Borders said it would close about 30 percent of its 642 stores, including all of its stores in the District and Prince George’s County. Thousands of employees will lose their jobs.
According to court filings, the stores expected to close soon include some of the chain’s most popular outlets in the region: at White Flint Mall in Kensington, Wisconsin Avenue NW in Friendship Heights and 18th and L streets NW in downtown Washington. In addition, Virginia stores are closing at Tysons Corner, in Winchester and in Stafford County; Maryland stores will be shuttered in Bowie and Largo.
All Borders stores in Austin, Texas will be closed:
It’ll close all three stores in Milwaukee, Wisconsin also — possibly a bad sign for downtown retail.
Reuters reports it this way:
http://www.youtube.com/watch?v=LIIJfp5N9r8
Ann Arbor.com wonders if Borders can reorganize (sound is low so turn up your volume)?
What went wrong? Newsy.com has this interesting take — noting how Borders’ competitors have moved to adjust while Borders didn’t.
http://www.youtube.com/watch?v=F93ZU0qT4GI
Karen Dionne, writing on AOL’s Daily Finance site, explains why this could have a damaging impact on authors..and eventually readers. Here’s part of it:
Beginning as early as the end of the week, 6,000 employees will be out work — hard news to hear in a difficult economy.
Borders’ bankruptcy filing also means publishers are now on the hook for hundreds of millions of dollars. My publisher, Penguin Group (USA) (PSO), is the hardest hit at $41.1 million. Others with more than $10 million at stake include Hachette, which is owed $36.9 million; Simon & Schuster (CBS) at $33.8 million; Random House at $33.5 million; HarperCollins (NWS) at $25.8 million; Macmillan, at $11.4 million; and Wiley (JW.A) at $11.2 million.
AND:
Even if publishers turn the supply tap back on, midlist authors are still at risk. According to an employee who works in the sales department of a publishing house, “Borders will likely be even more cautious about investing in midlist authors. While their new loans from GE Capital will allow them to finance, among other things, the purchase of new stock, Borders is not in any position to gamble. They’re likely, in my opinion, to skip more midlist titles than usual and to only spend their money on names they know they can sell.”
…If Borders orders significantly fewer midlist titles, “It’s entirely possible that publishers may offer lower advances [to authors], especially on midlist titles,” says the same publishing house employee. “The industry has depended on Borders as a major market for new titles. If the publisher can’t trust Borders to take a sufficiently large number of copies of a given title, this will factor into their profit and loss statements. As a result, they may advance less money to authors in order to increase the odds that any given acquired title will earn out [the advance].”
Or some publishers may just drop their midlist authors. The blockbuster mentality in which publishers concentrate their marketing and promotion on the books they perceive as guaranteed sellers has long made the midlist author’s life difficult. The additional financial burden imposed on publishers by Borders bankruptcy may well be the tipping point for many writers whose sales numbers are less than stellar.
It’s an understandable strategy in difficult financial times. But books are so much more than a product. Books help us gain insight or perspectives on issues that matter. They allow us to escape reality and delve into stories or worlds unknown. They inspire us, educate us, change us. Their variety enriches both our culture and our lives.
NPR’s Lynn Neary also warns that this is bad news for readers:
For those who love bookstores, this is sad news. No one is missing the irony that Borders was once considered the enemy of independent book stores — the rise of the superstore chains forced many independents out of business. But over the years, Borders became the neighborhood store for a lot of book lovers and many of them won’t be happy to see their local Borders go out of business. It’s also bad for publishing, which can ill afford to lose so much shelf space for hardcovers and paperbacks at a time when electronic books are increasing in popularity. And Borders’ bankruptcy filing comes just as many independents are still struggling to survive. Just last week, one of the biggest and best known independents, Powell’s Books in Portland, Ore., had to lay off 31 employees.
So we’re feeling a little nostalgic about bookstores today, wondering if they have a future in the digital world; wondering how much people care. Do you? What do you think makes a great bookstore and what will it take for bookstores to survive?
Deja vu?
In a sense it’s what newspaper owners and publishers are thinking in the Internet age — which has greatly impacted and shaken up the ways and methods by which Americans consume information and the arts.
Joe Gandelman is a former fulltime journalist who freelanced in India, Spain, Bangladesh and Cypress writing for publications such as the Christian Science Monitor and Newsweek. He also did radio reports from Madrid for NPR’s All Things Considered. He has worked on two U.S. newspapers and quit the news biz in 1990 to go into entertainment. He also has written for The Week and several online publications, did a column for Cagle Cartoons Syndicate and has appeared on CNN.