After filing for bankruptcy in February, the Borders Group will meet with creditors this month to outline its plans to reorganize itself and reinvigorate its business. In an email, CEO Mike Edwards told customers that the company wants to reestablish itself as America’s “best-in-class bookstore,” with author readings, book clubs, a “vast assortment of books” and many choices of e-books and readers.
E-books aside, that sounds similar to Borders as it existed a decade ago– before the company launched an increasingly desperate series of changes that left it a chaotic shell of its former self. The bankruptcy has been blamed on the rise of e-books, on Amazon, on competition from Walmart and other discounters, and even on the slow demise of book reading. Yet observers say many of Borders’ wounds are self-inflicted, the result of what one former executive describes as “incompetence, arrogance, greed, and poor decisions.”
The company opened stores in second-rate locations, which helps explain why 200 of them are holding going-out-of-business sales now and up to seventy-five more are likely to join in at any time. (See Borders’ closing for the closing of the Arborland Borders.) And unsuccessful expansions into the United Kingdom, Australia, and other countries diverted financial and human resources from its core business–selling books and music in the United States.
Instead of moving overseas, Borders management should have been moving resources online, says Albert Greco, a professor of marketing and media management at Fordham University. A revolving door of senior management “really hurt them,” says Greco–Edwards is the fourth CEO in three years.
“It was a constant shift in top people who didn’t know the business,” says Greco. While most were “smart and well meaning,” he says, their expertise and vision was based on selling groceries or women’s apparel or running hedge funds. “They did not know much about book retailing.”
Each new leader headed off in a new direction. Remember the store of the future with all the flat screens and gadgetry and online publishing? Or the focus on teens and manga books? Or the lifestyle approach of placing yoga mats next to books about yoga? The common denominator was fewer books and more impulse items like candy bars, board games, and candles. Last year, the company even trumpeted its partnership with Build-A-Bear.
Borders brass declined to talk to the Observer, but Edwards told the Wall Street Journal that the company might consider hiring a senior online executive to work with Borders.com and may add used books to its stores, noting they’re already selling well online.
In the future, Edwards told the paper, a typical 25,000-square-foot store will contain 15,000 square feet of books for adults, with the rest divided among kids’ books, educational toys and games, electronics, and a cafe.