The One About Borders
Did you hear the news that Borders finally--and I mean finally--filed for Chapter 11 bankruptcy? It's not great news, obviously, especially when you consider the fact that the company will have to close 200 stores. But it's not completely hopeless, either. If you haven't been following this situation at all, Borders has been struggling for a few years now. PW listed the amount of debt owed to each publishing house: Penguin is owed $41 million, Hachette $36.9, S&S 33.8, and Random House $33.5. In Christmas 2010, Borders listed its assets as being $1.28 billion. Its debt exceeds that, which, by my understanding, means Chapter 7 bankruptcy (when the company would have liquidated itself and gone out of business entirely to repay debts) wasn't a great option for anyone. Because they filed for Chapter 11, Borders will be able to reorganize and (attempt to) reposition itself in the marketplace under supervision of the court, as well as acquire loans and financing under favorable terms. Meaning that Borders will still be operational as a company, even if it's only limping along for a while.
I was really frightened that Borders was going to file for Chapter 7, to be completely honest. The idea of there being one less major retailer out there would have been Bad News Bears for publishing houses, not only because 'd mean less shelves to get their p-books out in the world, but also because it would mean (I assume, not knowing with absolute authority on how, precisely, these things work) a larger marketshare for Amazon and B&N, which in turn would lead to them having an even greater say in pricing and how publishing houses conduct their business. I don't and have never worked in Sales, so I'm honestly at a loss when it comes to predicting how this might affect publishers now, as in right-this-second.
I was in a Borders this weekend with a friend and we were trying to figure out why Borders was lagging so far behind B&N. I think a great deal of it has to do with the fact that Borders has never exactly been a trailblazer when it comes to new ideas. B&N has arguably always been more strategic about additions to stores (adding Starbucks, for instance) and in-store organization. It also has much better branding than Borders ever did. You can instantly identify a B&N bag or logo, all of the stores have a similar look and appeal, and their name as become synonymous with the brick-and-mortar type of book store. And Borders... well, Borders is Borders.
What do you guys think about what's happening with Borders? How do you think they could stand out in the marketplace, aside from adding more freaking toys to their shelves to pad their bottom line?