Why Borders Failed While Barnes & Noble Survived : NPR

It looks like it’s all over for the borders library chain. the company will be liquidated, that is, sold in parts, and almost 11,000 employees will lose their jobs. the remaining 400 stores in the chain will close their doors at the end of September.

The retailer’s first bookstore opened in Ann Arbor, Mich., 40 years ago. along with competitor barnes & Noble, Borders pioneered the megabook store business. but borders made some critical mistakes over the years that cost them the business.

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The vast expanses of commercial space that the borders will soon abandon speak of a gigantic business that has essentially committed suicide. at one point, size was his advantage. borders earned a reputation for offering a wide variety of books (tens of thousands of titles in a single store) at a time when most bookstores could afford to stock a fraction of that.

borders also had a technical head start: a superior inventory system that could optimize, and even predict, what consumers across the country would buy.

but in the mid-1990s, the borders lost their edge.

“He made a big bet on merchandising. [Borders] invested heavily in CD and DVD sales, just as the industry was going digital. And at the same time, Barnes & Noble was going backwards,” Peter says. wahlstrom, which tracks barnes & noble for investment research firm morningstar.

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he says barnes & Noble also invested in increasing its online sales. Finally, he also developed his own electronic reader, the corner.

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the edges do not. Instead, it expanded its physical plant, renovated its stores, and outsourced its online sales operation to amazon.

“From our point of view, that was more like handing over the keys to a direct competitor,” says Wahlstrom.

In fact, outside a Borders bookstore in Arlington, Va., shoppers say they rarely buy books the old-fashioned way.

“I’ll go to the borders to find a book and then I’ll go to amazon to buy it, usually,” says customer jennifer geier.

With so many people buying books online, the borders were lost. The last time he made a profit was in 2006. In February of this year, he filed for bankruptcy.

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Those who lamented the rise of the book-selling giants might see irony in border’s demise. With one of the biggest players leaving, there might be some room, once again, for the little ones.

“I think there are a lot of different niches that can still be held, but I don’t think the massive book seller needs to be as prevalent or as obvious as it was five or 10 years ago,” Wahlstrom says.

wahlstrom says that borders are disappearing at a time when, as consumers, readers are more empowered than ever. he says that he still reads paper books, but he also reads on his iphone, computer or tablet.

“just like i’m probably device agnostic, i’m carrier agnostic. i can go online, i can go to barnes & noble, i can go to apple, or i can go to google. or i can borrow it from a friend or i can go to a library,” he says.

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Dan Raff, a management professor at the Wharton School, argues that America’s small towns will suffer from the loss of a bookstore chain.

“The big box store was glorious while it lasted. For people in many parts of the united states, it was a kind of aladdin’s cave,” says raff. on the borders, people could access the literary variety, unlike smaller, independent bookstores.

with barnes & noble staking its future on digital technology, says raff, the big bookstore probably only lives in big cities.

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