Borders For Sale

For some weeks I have been reading about the re-invention of Borders. They have a new protocol store which is supposed to be more technologically hip--sort of like an Apple Store for books--where you can get on site help to download books and music. I read a review of the first one and the impression of the reviewer was that the new technology did little to enhance the sale of books, but of course that was one person's opinion. I think the general premise was that if you got people in the store, helped them download the songs they want directly to their MP3 players, they might buy more since it was so user friendly.

The last time I visited our local Borders store looking for a specific title, I couldn't help but notice that the shelves were looking a little bare. There did not seem to be the abundance of books that there once was--certainly not up front where you would think they would be stacked sky high--and even the best-sellers area looked a little sparse. Also their shelving system seems to defy my logic. The title I wanted was indeed there but it took two people to find it.

So when I read about re-invention, I was all for it. Apparently however, the plan was too cash intensive. Today's paper carries the report that Borders has "put itself up for sale and halted its dividend." According to CEO George Jones, the company was unable to borrow the money to remodel all its stores and pay for the new technology it promised.

Amazon, of course, is killing retail book sales but for some reason I thought that Borders and Barnes and Noble were impenetrable. Turns out that discount retailers like Wal-mart and Costco have also been giving the big two a run for their money. And banks are just not that eager to lend money these days. Border's largest shareholder, Pershing Square Capital Management agreed to lend the company $42.5 and made an offer for some of its international stores. And not to rub it in, but Barnes and Noble's shares jumped 8.1% on news that its fourth quarter profit had fallen less than expected.

Isn't it ironic? It doesn't seem all that long ago that Borders and Barnes and Noble were blamed for stomping out all the smaller, independent bookstores and now an even bigger retailer is blamed for ending their dominion. I wonder, however, if people are buying fewer books or just buying them with one click. I also wonder if bookstores are just going to become obsolete when we all can download books directly to our electronic readers. Or maybe better still, the independent bookstores might rise from the ashes because people really want old fashioned recommendations and service.

In my neck of the woods, the local Borders put Barnes and Noble (which was less than a half mile away) out of business. Seems like we might soon be without both.