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  • Want to Buy a Bookstore Chain?

    Posted by David Foster on March 20th, 2008 (All posts by )

    The Borders Group is not doing very well, and may offer itself for sale.

    In previous posts, I’ve asked the questions What would you do if you were running General Motors? and What would you do it you were running Sears Holdings? (have to note Ralf’s classic comment about the GM question: “I would stop running the company and start just plain running.”)

    So, just for fun, today’s discussion question is: If you were the new owner of Borders, what would you do?

    As a thought-starter, here’s a WSJ article (registration required) about the chain’s attempt to increase sales by changing the way books are displayed–with the covers face-out. This is less space-efficient, of course, and reduces the number of titles a store can stock. Borders is also planning to locate digital centers in the stores–these are for downloading books and music, printing digital photos, etc. They are also terminating their relationship with Amazon, choosing instead to operate their own online ordering system.

    Disclosure: I’m a current Barnes & Noble shareholder–I was once a BGP holder, but fortunately got out at about $19.

    Thoughts?

     

    17 Responses to “Want to Buy a Bookstore Chain?”

    1. Shannon Love Says:

      My suggestion would be to realize that bookstore are no longer shops as much as they are now places of activity. Borders needs to concentrate on the activity and not try to be a the big box store of books.

      Times have changed. People used to go to a book store to find out what books were available. Now they look online. If all I wish to do is purchase a book, Amazon is more efficient than going to a physical store. If people know what they want, they don’t have to go to the store to get it.

      The value of a modern bookstore is the ability to spend time with books and discover something new. Bookstores should be configured to be places where people go to peruse and read books. Bookstores should think more about creating an environment where people discover things to buy instead of a place people come to get something they already know about.

      I’ve been hanging at a local Borders or similar book store at least one a week for over 15 years. It’s a nice, relaxing adult thing to do. I think Glen Reynolds called this “The Comfy Chair Revolution” the idea that businesses draw people in with comfort and then they buy things.

    2. fred lapides Says:

      I have much preferred Barnes and Noble. Borders has slim pickings and a lot of non-book stuff. All these stores now feel they must have a coffee bar and wi fi.
      But for serious book buying, give me online.

    3. Robert Schwartz Says:

      Shannon’s right and Fred’s right. I think the only viable direction is as an internet cafe, coffee shop, lending library, bookstore & gift shop. The other thing is go through the real estate carefully and see which locations work and which don’t. It may need Chapter 11 to shed enough real estate to make it work.

    4. cjm Says:

      for a start they could flush out the many staff who push their personal political agenda while at work. just like GM could start building cars that aren’t total crap. neither will happen and neither company will survive. no loss in either case.

    5. Sgt. Mom Says:

      Staff of Borders stores could be a hell of a lot more welcoming to those local authors who aren’t anywhere near Times Best-Selling list territory. Independently owned bookstores couldn’t be more welcoming or helpful to us poor scribblers with small or independent press books when it comes to setting up signings and events. B & B and Borders couldn’t be bothered. The local Borders event-manager snapped ” What’s your address? I’ll send you a brochure about what to do to get in our store,” and fairly slammed down the phone. I’ve never recieved anything in the mail, and have pretty much no interest in doing an event at that location.

      I’ll have a signing at the independent bookstore in three weeks, and their staff and manager couldn’t have been nicer or more interested in my book.

    6. Don Says:

      Apparently, the book business can’t read the demand side of the market anymore than the suits can read the demand side of the music industry. They blame file sharing and downloading for their problems. Is the publishing industry going to start blaming libraries?

      For the suits, its ‘units’ with the appropriate adjectival tag that are moved. For the writer or musician, its art. For the suits its about leveraging and bean counting. For the crafter, its about the integrity of his/her product.

    7. MD Says:

      Odd, I had no idea Borders was doing poorly. I guess I have been in neighborhoods where the Borders offered better selections than the Barnes and Nobles, but then I tend to live in egg-heady places where all the bookstores do well.

      I go to my local Borders because I like the ‘vintage’ building it’s in, I like the cafe, and I like the girly papery things they have in back. I use them for art projects and to send to my nieces. There’s just so much competition these days, though, I guess. You can buy books, cafes and girly papery things lots of places these days.

      I think you should be able to order anything you want at a Borders like at Amazon. When I’ve tried ordering other books, it’s cumbersome. They should be Amazon online and be amazon in their shops. Someone nice and friendly to help you order whatever you want, no extra charge.

    8. MD Says:

      that should be ‘go to cafes’

    9. MD Says:

      And finally, I didn’t even know they did things with Amazon already and I go to Borders all the time!

      Hmmm, maybe that’s Borders problem. The stores are just plain poorly run. Or I am just a ditz.

    10. Jonathan Says:

      You’re a customer. The store should make things easy for you.

    11. Shannon Love Says:

      The last time I checked, Borders also required that you pay something like $30 a month to connect to their proprietary WiFi network. Since the entire idea of WiFi is mobility in the first place, forcing patrons to cough up just so they can connect when they happen to be in your store is stupid.

    12. gattsuru Says:

      1 — Realize that you do need to compete with the online merchants. I’ve had co-workers spend hours looking through books at Borders or B&N, realize that they’re looking at a hundred of dollars worth of costs to purchase through you instead of through an online retailer. Chances are pretty good that they don’t need the book today that much.

      2 — On a related note, don’t try to make most of your money on big, expensive books. Those would be the ones that people bother looking around for pricing, contemplate purchasing used, or might not need to purchase that day. Learn from the supermarkets : trashy paperbacks are your biggest mover and the least likely to make people thing twice before purchasing.

      3 — Know what’s worth your time and space. Best-sellers are. Six year old computer books aren’t. This should be a duh, but I still see fresh copies of old books coming into these stores. Yes, people still use XP, but they don’t need to know that Windows has no included wireless networking support (before a SP). This isn’t just about the waste of shelf space, it’s actively detrimental to getting sales even when you do have useful stuff as well — if I see a few dozen copies of dust-covered Guide to Windows 3.11 For WorkGroups, I’m not going to look for a Windows Server 2008 IIS at the place.

      4 — Appearance is important, but usability is more so. I’ve been in far too many Borders with crappy lighting or poorly placed seats, and that’s not exactly conductive to reading. Most are good about it, but the bad ones are what people remember.

      5 — Learn supply chain and product placement. If it’s harder for me to find a New York Times best seller than a dozen cut cat calenders in July, you’ve got a problem.

    13. dre Says:

      It might help to stock books that people want to read:

      LF & Borders

      It certainly seems like there’s some truth to this. There are many exceptions, but generally Borders seems to have a much “harder” time carrying my book at all or as a bestseller:

      Jonah—

      Even though I had no difficulty whatsoever finding LF at an Omaha Barnes & Noble, since my purchase I have kept an eye out, and I have to confirm what other readers are reporting: Borders seems to be doing its utmost to keep the book off its shelves.
      http://liberalfascism.nationalreview.com/post/?q=MGJiM2VmOTBiMmFkYzYzNjU1MTRlMzQxMDdmZWVmOTA=

    14. Jeff Says:

      Shannon is right to point out that “bookstores are no longer shops as much as they are now places of activity,” but I’d add that Borders and B&N would be wise to realize that their main competitors now are the independent bookstores, especially the ones that hold several events per week and inspire fierce loyalty among their customers. I’d be curious to see what would happen if the big chains let each store develop its own culture according to local needs…

    15. Jim Miller Says:

      FWIW, my experiences here in a Seattle suburb: There are two large Barnes and Noble stores and a large Borders store within a few miles of where I live. The Barnes and Noble stores have much larger selections than the Borders store, but I usually shop at Borders, anyway.

      Why? Because the Borders membership plan, whatever they call it, offers me 20, 30, and 40 percent discount coupons regularly. In contrast, Barnes and Noble charged me 25 dollars a year to be a member, in return for a 10 percent discount on all books and, sometimes, other discounts.

      Whether these on-line coupons make sense for Borders, as well as me, is something I have often wondered about, but I don’t know enough about the book business to tell.

      Incidentally, over the years, I have found some of the best book bargains at Edward R. Hamilton in Connecticut. For instance, I once bought a complete, annotated Sherlock Holmes collection there for, as I recall, 16 dollars. And you can sometimes find extraordinary treasures there, such as Kenneth Martis’s Historical Atlas of Political Parties in the United States Congress, which cost me, as I recall, less than 40 dollars. (1989 edition)

    16. markm Says:

      Aside from being a place to hang out with a few best sellers on display, would it be possible for book stores to be a place where you can riff through esoteric books at a terminal, order them, and receive them in about a week at a total price significantly lower than Amazon + UPS delivery rates. Printed books are heavy and freight is always going to be a significant part of the cost, but it costs a whole lot less per book to have a truck drop a few boxes off at the store than home delivery a book at a time does. In addition to the price advantage, the store can also give you a better preview (the full typeset file on a terminal using a closed network to make piracy difficult), and even let you check out the cover and bindings before paying more than a small deposit.

    17. Dave Schuler Says:

      I wouldn’t tell them anything. I’d ask questions.

      First, what business are you in? A remarkable number of managers don’t know the answer to the question. The answer matters. The book business isn’t the same as the hospitality business. They can’t be managed the same way. I don’t know what business Borders thinks they’re in (and I don’t think they do, either).

      Second, is your core business still viable? Things change. What was viable once upon a time may not be viable today.

      If your core business isn’t viable any more, what else do you know how to do? What are you positioned to do? Do you have the skills and knowledge necessary to do something else you’re positioned to do? Can you get them?

      If your core business is still viable, why aren’t you making money? Competition? (your core business might not be viable any more) Bad historic decisions? Not selling enough? Spending too much? Too much overhead? Lack of focus? What?