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Borders delays book payments to publishers; survival in doubt in e-book era

Friday, December 31, 2010 · 2:05 pm · 46 Comments

“Borders has been delaying payments to book publishers in signs that it may be one of the first major victims of e-books,” Electronista reports. “Early reports from Publishers Marketplace on Friday said it was putting off the payments to help refinance its debt but also wasn’t certain that the plan would be effective. It might have to break its existing credit deals early into 2011 after facing a ‘liquidity shortfall,’ it said.”

“Financial pressure has now become acute at the company and mimics that of Circuit City before it was defunct… Any financial collapse at Borders could have a ripple effect on the e-book business. It would cost Kobo one of its most important markets for e-readers and would close one of the few major online book stores,” Electronista reports. “The shift could feed Amazon, Apple and other survivors with extra customers.”

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Comment Feed

46 Comments

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Justin

Friday, December 31, 2010 - 2:16 pm · Reply

Over Xmas I noticed the Borders on Michigan Ave in Chicago, one of the busiest shopping districts in the country, was closing it’s doors.
silverhawk

Friday, December 31, 2010 - 2:23 pm · Reply

I feel sorry for the employees.
Disgusted

Friday, December 31, 2010 - 2:26 pm · Reply

Kaboom?! as if you’re excited about another american company failing and thousands more people with families to support being out of work. Most of MDN takes are entertaining, but this one is a little thoughtless.
coolfactor

Friday, December 31, 2010 - 2:29 pm · Reply

@Disgusted,

I hear what you’re saying. Yes, it was a heartless take, but also a truthful one. Any company that fails to keep up with the times will eventually be facing a similar demise. Borders has had years to embrace the direction that technology is going and clearly they have failed to do that. The either need to upgrade their business model or close the doors.
MacUser

Friday, December 31, 2010 - 2:34 pm · Reply

I think MDN’s take is simply suggesting that if your employer is a dinosaur and doesn’t innovate, they won’t be around long … like Ballmer, et al. I don’t think they’re rejoicing that people will be out-of-work.
KenC

Friday, December 31, 2010 - 2:45 pm · Reply

I’m guessing Kobo was an ereader? Sad, of course, but that’s natural selection. Not only is Borders virtually gone, but Barnes and Noble is on the selling block. Brick and mortar bookstores are going the way of CD stores.
Rdiddly

Friday, December 31, 2010 - 2:47 pm · Reply

I for one will miss them. I always enjoyed their stores.
Jon000

Friday, December 31, 2010 - 2:53 pm · Reply

This has nothing to do with e-books. Borders just sucks. They have more crap that nobody wants than any store I’ve been in.

recent conversation – “no, we don’t have it but we can order it for you…”
Me: “No thanks – I’ll check B&N or order it from Amazon.”
fandango

Friday, December 31, 2010 - 3:02 pm · Reply

Borders Books: the new Tower Records…
MarkyMark

Friday, December 31, 2010 - 3:07 pm · Reply

The thing is, is that Borders has been in big-time financial straits for years, and since well prior to the “global financial fiasco”, so how they’ve hung on this long I have no idea.
LordRobin

Friday, December 31, 2010 - 3:10 pm · Reply

@Jon000
Truth. It’s depressing how far Borders has fallen.

I first visited a Borders in 1994. I thought it was the most amazing store I’d ever seen. A friend and I spent over 90 minutes in the store, and we both walked out with something we thought we’d never be able to find.

Then somewhere along the line, Borders stopped taking risks. They became just like their little brothers Waldenbooks, just bigger, with more of the same crap. There just wasn’t reason to spend any time in the store anymore.

They got away with that for a good while because they had so little competition. Then Amazon came along. Once real competition arrived, the floor just fell out from underneath Borders.

Borders is paying now for a decision they made back when they figured they were safe from competition. Sadly, it’s probably not possible now to revert to the exciting, creative store Borders was when it first opened.

(BTW: “no, we don’t have it but we can order it for you…” is the death rattle of any retail company.)

——RM
IMJeffrey

Friday, December 31, 2010 - 3:11 pm · Reply

As a book lover it’s always sad to see a bookstore, really any bookstore, close it’s doors. I used to love spending time in Borders, sipping on a coffee, and perusing the magazines and bookshelves. But, in today’s marketplace you need to adapt, innovate, and evolve to stay viable. Unfortunately for Borders, it seems to me that they don’t do much of that anymore. Barnes and Noble seems to be more adept at changing/evolving and they are struggling as well. At least with the NOOK, B&N is welcoming e-books as best they can – and evolving little by little from a traditional bookstore model which just sells books and magazines – unlike what I see going on at Borders.
Lightningscream

Friday, December 31, 2010 - 3:44 pm · Reply

The borders in bica glades and 441 is closing the guy said they lost their lease to old navy. It was a void store but with the net and iBooks there’s no reason to go thete no innovations. Just the end of an era
WandringMexiCan

Friday, December 31, 2010 - 4:13 pm · Reply

When I was in high school, I worked at Kroch’s & Brentano’s, the bookstore chain in an outlying Chicagoland area. Its signature black and white bags peppered the streets all over Northern Illinois. The store had been around since 1907, was very well respected, and I routinely saw celebrities in the store. It was perceived as one of those companies that would be around in the next 100 years.

I’ll never forget the day the young “upstart” from Michigan rolled into the neighborhood sometime around 1990. The manager and assistant managers of the store went over to check it out. When they returned from their reconnaissance, they scoffed at what they saw and said it would never make it. “People were just sitting in big, comfortable chairs reading books they hadn’t yet purchased,” said one. Another said, “they even have a café. People will get coffee and crumbs in the books you end up buying!” The final verdict was one of dismissal and the expectation that the new competitor would close shop in the next few years.

Only five years later, it was K&B that was closing its doors, not the competition, which was thriving. The “upstart” was, of course, Borders.

The advent of computers and, to an even larger degree, the Internet, has been so disruptive in so many industries. I do not see things changing for the foreseeable future, as very little is immune to the effect of the Web and the instant gratification it provides. Then there are the barcode scanner apps on smartphones everyone is walking around using to either find the best price locally or to check how much cheaper something is on Amazon (no tax and free shipping for Prime Members).

Probably one of the few exceptions is the restaurant industry, and even then I will hear people incredulous at the fact a mom and pop greasy spoon “doesn’t have a web page” or officially on Gowalla or the like.

In essence, anything that can be digitized is vulnerable to Borders’ fate.
ken1w

Friday, December 31, 2010 - 4:16 pm · Reply

Ever since I started using my iPhone to read books, I’ve been visiting my local Borders store less and less. They have an ebook app (store and reader) too, that’s “powered by Kobo”; it’s not bad, but I mostly use Amazon’s Kindle app.
Lurker_PC

Friday, December 31, 2010 - 5:20 pm · Reply

@ Disgusted – MDN didn’t mean any offense. They used the word “Koboom” which is a play on the name Border’s E-book reader, Kobo. I thought MDN’s take was pretty funny. Keep up the good work MDN.

Regards.
scottie_in_the_uk

Friday, December 31, 2010 - 5:23 pm · Reply

This is sad news to me, because I used to spend a lot of time at the local Border’s meeting with friends and having coffee (before the move to England). But, I never spent time searching for books there, nor B&N. It’s painful to search row by row, and even worse when customers put things back in the wrong spot. I can stay that way for weeks. Plus, the search kiosks are awful and waiting for an employee to help is even worse.

The only things we have bought there in the past couple years were the Twilight books when I my discovered the series and had to read them all in a week. Other than that, Amazon has been my book supplier for the past 5-6 years. Haven’t jumped on the e-reader wagon yet. Maybe soon.

Stores like this might soon be a distant memory in American history. Like I said, sad for me, but the model just doesn’t make sense anymore. Luckily, the tech giants haven’t figured out a way to replace my local coffee shops with 1′s and 0′s, so I’ll still have that.
Elsic1975a

Friday, December 31, 2010 - 5:28 pm · Reply

The retail stores are nice to browse, but that’s about it. Earlier today, I was shopping at Barnes and Noble and found an interesting book (Influencer: The Power to Change Anything). Price? $27. Looked on the Amazon app on iPhone and found it new thru Amazon for $17.

Looked up Kindle pricing and it’s only $9.50. I ordered it on the spot and it was on my Kindle when I got home. It’s just like browsing a music store and finding the album on iTunes on my iPhone for half price and downloading it right there.

Most of these retail shops are there to browse and give me ideas, but I almost always do my purchasing online in some form or other.
alansky

Friday, December 31, 2010 - 6:47 pm · Reply

Placing the blame for the demise of Borders Books solely on ebooks is ridiculous. Amazon was taking a big bite out of bookstore profits long before ebooks became popular. My guess is that the bookstores that have most successfully weathered the storm are the ones with the best-run operations. It’s a jungle out there.
skylark

Friday, December 31, 2010 - 7:36 pm · Reply

Ruination and quietus is inevitable in a struggle between an old model and a new model.

Don’t forget the big stores like B&N and Borders subjugated a multitude of traditional book stores; small family owned shops locally and around the world, in their bid for an empyrean Magnum opus.