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Borders Closes Stores, Start Own Web Retailing
engine




msg:3291374
 8:37 pm on Mar 23, 2007 (gmt 0)

The Borders Group, one of the nation's largest book retailers, announced a new strategic plan Thursday to close nearly half of its Waldenbooks stores, sell off or franchise most of its 73 overseas superstores, sever its relationship with Amazon.com and start its own online retail site.

The company also reported a dismal fourth quarter that ended with a loss of $73.6 million, in contrast to a profit of $119.1 million in the period the year before.

Borders Closes Stores, Start Own Web Retailing [news.com.com]

 

mcavic




msg:3291449
 9:38 pm on Mar 23, 2007 (gmt 0)

Starting their own Web retailing sounds like a big waste of money. I don't know of any advantage they can provide over Amazon. An even bigger mistake if that means Amazon will no longer accept Borders gift cards.

On the other hand, most of the Waldenbooks stores are too small, and don't have a diverse enough inventory to attract a lot of customers. So closing them in favor of the larger Borders stores would be a big plus.

celgins




msg:3291452
 9:43 pm on Mar 23, 2007 (gmt 0)

Maybe they're using the online sector to challenge Barnes & Noble's online presence.

dakuma




msg:3291526
 11:10 pm on Mar 23, 2007 (gmt 0)

I see this as a smart move. Going online will save them money in many ways, wages, rent, land tax etc. Books are one thing I do buy online regularly, and unlike other products, I don't really need to hold the book in my hand before I'm willing to buy. It just makes sense to me, they either make a change or risk going bankrupt losing that kind of money. I'm sure they have some idea of just how many books Amazon is moving on a daily basis helping them make their decision.

ByronM




msg:3291600
 2:11 am on Mar 24, 2007 (gmt 0)

see this as a smart move. Going online will save them money in many ways, wages, rent, land tax etc. Books are one thing I do buy online regularly, and unlike other products, I don't really need to hold the book in my hand before I'm willing to buy

I like Borders because generally the people who work there have been very helpfull and knowledgeable. They tend to read books themselves or can help you find what you are looking for.

Amazon.com is great for when i know what i need, but nothing beats a book store, friendly staff and a cup of hot Joe and some relaxing music while browse for the next great book/story/adventure.

Not to mention i've meet & networked with a bunch of great friends at the bookstore.

mcavic




msg:3291615
 2:38 am on Mar 24, 2007 (gmt 0)

nothing beats a book store, friendly staff and a cup of hot Joe

Exactly.

incrediBILL




msg:3291622
 2:54 am on Mar 24, 2007 (gmt 0)

nothing beats a book store, friendly staff and a cup of hot Joe

Yes, nothing beats stepping over a bunch of dead beats that won't buy a book that confuse a Borders with public library. Nothing like hanging out with a bunch of caffeine jazzed cheapskates to start the day.

FWIW, I didn't think anyone went into a Waldenbook past 1990, don't think I've seen one in years, so that's probably a good move on their part.

dakuma




msg:3291625
 3:01 am on Mar 24, 2007 (gmt 0)

Byron: Yes, I spend enough time at Chapters, and I could not agree with you more, however the point is.. somewhat moot, with all due respect. Its not about what is the "better" option, its about not losing 70+ million dollars and going out of business. So while its not my prefered way to pick up a book at all, maybe the economics are pushing bookstores in this direction. Are people reading more? Probably not. Are more books being sold? Probably not. Whatever reasons they have, beyond the cost benefits, I'm sure they would keep all of their stores open if it was working.

walkman




msg:3291640
 4:08 am on Mar 24, 2007 (gmt 0)

>> Amazon.com is great for when i know what i need, but nothing beats a book store, friendly staff and a cup of hot Joe and some relaxing music while browse for the next great book/story/adventure.
>> Not to mention i've meet & networked with a bunch of great friends at the bookstore.

apparently they aren't enough Byrons, and what's good for some, is not necessarily good for Borders' shareholders :)

I vote for smart move!

physics




msg:3291667
 5:53 am on Mar 24, 2007 (gmt 0)


sever its relationship with Amazon.com and start its own online retail site.

What they should be doing is looking to increase their revenue from the coffee shop, perhaps by making it bigger (though the one I frequent is already pretty big with some large tables), adding more outlets, and adding a more full service restaurant. Go ahead and raise prices on coffee, most of us cheap skates will pay them so we can still read books while there.
Also, make it easier for people to get on the wifi for a reasonable price: pay for your coffee, clerk asks you if you want to use the interenet, you say yes and get x hours of internet access for $x charged to your CC that you paid for your coffee and pound cake with. x must be low enough that the average person who will pay $4 for a latte can afford it.
Take advantage of the cheap skates and rent books (if people want to take them home) like Blockbuster rents movies ... if they can do it with books in the airport then you guys can do it.
They get a good chunk of my cash for coffee and snacks but there is no way they are ever going to get anywhere near as much book money from me as Amazon does. Amazon books are usually 30% or more off, I get 5% affiliate kickback and 'free' 2 day shipping with my Amazon prime membership. Borders considers a 25% off list price sale a special event. Plus I guarantee their web store will not come within an order of magnitude of Amazon.

I'm all for them cutting some of their brick and mortar dead weight but they should focus on what their good at and keep their 'super affiliate' relationship with Amazon.

sun818




msg:3291674
 6:11 am on Mar 24, 2007 (gmt 0)

> keep their 'super affiliate' relationship with Amazon.

Yep, Amazon has many years of experience with warehousing and fulfillment. Why is Borders reinventing the wheel when the percentage they pay to Amazon handles the infrastructure question. Borders could go out of business while trying to figure out their web retailing infrastructure.

ByronM




msg:3291690
 8:10 am on Mar 24, 2007 (gmt 0)

Yes, nothing beats stepping over a bunch of dead beats that won't buy a book that confuse a Borders with public library. Nothing like hanging out with a bunch of caffeine jazzed cheapskates to start the day.

Funny you call people who read books dead beats.

I agree, close all the Walden bookstores, there just isn't anything left in them besides romance novels and comic books.

I've meet more dead beats hanging out in forums than i could ever say i've meet at a book store :)

spaceylacie




msg:3291715
 9:02 am on Mar 24, 2007 (gmt 0)

I hope they know what they are doing, bold move. I buy most of my books used at a local flea market for at least 75% of the cover price. But, if a new book is coming out or has just been released and I got to have it, I buy from Amazon. I wish I had time to hang out at my local book store... but since I actually have a job and only really have time to read at night in my PJs while I'm dozing off... I'll have to stick with shopping online for books.

wheel




msg:3291802
 1:07 pm on Mar 24, 2007 (gmt 0)

Funnily enough, I got started in the business running an online bookstore. And I haven't bought a book online in years - and I buy a lot of books.

Most of the independent bookstores where I live have been long wiped out. This type of move by Borders is a walmartization of the book industry to the web. And what that does is create more opportunities for local indie bookstores again. Ones that can provide either niche markets, or solid service.

BillyS




msg:3291855
 2:54 pm on Mar 24, 2007 (gmt 0)

>>Yes, nothing beats stepping over a bunch of dead beats that won't buy a book that confuse a Borders with public library. Nothing like hanging out with a bunch of caffeine jazzed cheapskates to start the day.

I agree - dozens of people too cheap to buy the book, just hanging out for a couple of hours. I come in to browse books before I buy and I need to stand the whole time because someone’s set up camp for the day.

(Then they put what is essentially a used book back on the shelf.)

walkman




msg:3291882
 3:46 pm on Mar 24, 2007 (gmt 0)

>> Funny you call people who read books dead beats.

Funny you call people who read books (without paying) dead beats.

skunker




msg:3291883
 3:48 pm on Mar 24, 2007 (gmt 0)

nooo....don't close waldenbooks...then my little one horse town won't have a bookstore. *cries*

incrediBILL




msg:3291884
 3:53 pm on Mar 24, 2007 (gmt 0)

Funny you call people who read books dead beats.

If you read them and don't buy them, you're a dead beat.

Besides, I get books from Amazon cheaper and with Amazon Prime, shipping is free the rest of the year and we use it a bunch. Doubt Borders online efforts will compete with that.

ken_b




msg:3291892
 4:03 pm on Mar 24, 2007 (gmt 0)

I buy a fair number of books, seldom online. I buy online only if the book isn't available locally without a prepaid final sale special order.

I like to look at the book before I buy it. Sometimes the ads and promos for a book just don't tell the whole story.

TravelSite




msg:3291978
 6:39 pm on Mar 24, 2007 (gmt 0)

Borders online relationship with Amazon was extremely stupid in my opinion. People go onto Borders, see the Amazon logo, realise that the whole site is really run by Amazon - and then go to Amazon.

Borders have essentially been saying to their online users: Amazon is the authority on the web for books, not us: why not go direct to Amazon.com next time - heck, it might even be cheaper on their site (as we're selling via a third party).

- Just like how Yahoo promoted Google when it used Google results.

Why bother using a third party when you can go straight to the company offering the service? People also think that you'll get things cheaper by cutting out the middle man.

Solely due to Amazon's success however, Borders do have an opportunity online. Amazon's american site sells many products - books is only a small part. Borders could focus on selling online books - becoming "the" expert in only selling/recommending books - at the expense of Amazon who are busy trying to do everything.

Many people who just want to buy books would then go to borders website as it would be a quicker process (no need to select the books tab) and as Borders specialise exclusively in selling books.

Borders could also integrate things into their offline stores better - e.g. a membership card/id that gives you points and shows what you bought both offline and online.

P.S. I buy non-fiction books from Amazon only. Even the large Border stores don't always have the books I want. And even when I see an interesting book in the shops, I'll often go home and buy it on Amazon anyway - it could be cheaper online, there could be a new edition out and I can read other peoples reviews on it.

[edited by: TravelSite at 6:42 pm (utc) on Mar. 24, 2007]

Kirby




msg:3292047
 9:04 pm on Mar 24, 2007 (gmt 0)

Bookstores are a good experience, especially for young readers.

We hit Borders about once a month. I check out books that have been suggested, read a bit, and buy it if I intend to read the entire book.

My 9 year old will spend an hour or so checking out books and we end up walking out with 5-6 books for her to read that month. By the end of this year, she'll have read and I'll have bought at least 75% of her current addiction, the Nancy Drew series.

Not everyone seemingly camped out is a deadbeat.

danny




msg:3292191
 11:26 pm on Mar 24, 2007 (gmt 0)

I buy most of my books from bookshops, though mostly at sales or on special - new books are just too expensive. If I'm buying online I buy from Amazon. Even with shipping to Australia, on expensive items they sometimes work out at <50% of the price shops here would charge.

As a book reviewer, I also get free review copies from many publishers. And I make a lot of money from Amazon's affiliate program.

I've never been that excited by the Borders shops in Sydney - Abbeys and Gleebooks are still better for my kind of books - but it will be interested to see how they go as franchises or independents.

galloping ghost




msg:3292192
 11:33 pm on Mar 24, 2007 (gmt 0)

I think the question is what does Amazon charge Borders? Our friends in Seattle have had some high profile defections recently including Toys R'Us. There mus be something else going on there

ispy




msg:3292194
 11:46 pm on Mar 24, 2007 (gmt 0)

I Robot: Why go to the bookstore when you can pay half the price at Amazon, get next day shipping, and make your own cup of joe at home for pennies?

walkman




msg:3292242
 2:00 am on Mar 25, 2007 (gmt 0)

I think that has been going in the wrong direction:

1. some buy books, but apparently not enough people, otherwise they would have kept the stores.

2. while huge bookstores could be good for the public, why should Borders shareholders pay for the this public service? Talk to your representatives and see if they are willing to subsidize :)

mcavic




msg:3292280
 2:54 am on Mar 25, 2007 (gmt 0)

I think the question is what does Amazon charge Borders?

Amazon pays Borders a percentage of the sales, right? So it doesn't really matter what that percentage is, it's free money for Borders.

Why go to the bookstore when you can pay half the price at Amazon, get next day shipping

Next day shipping costs as much as the book, and what if you want it today?

why should Borders shareholders pay for the this public service? Talk to your representatives and see if they are willing to subsidize

Shareholders aren't paying for anything. In fact, they're being paid a 2% dividend. And besides, anyone who doesn't like what Borders is doing overall, shouldn't be a shareholder.

walkman




msg:3292331
 5:19 am on Mar 25, 2007 (gmt 0)

>> Shareholders aren't paying for anything. In fact, they're being paid a 2% dividend. And besides, anyone who doesn't like what Borders is doing overall, shouldn't be a shareholder.

wrong on both counts: one, Borders changed the policy,apparently to please shareholders so it worked the other way around.

Second, they aren't being paid anything, they OWN the company. They put in hard cash they could have invested somewhere else, so they aren't being paid jack; at most they are getting what's theirs.

jessejump




msg:3292360
 7:14 am on Mar 25, 2007 (gmt 0)

>>>>>>>> I Robot: Why go to the bookstore when you can pay half the price at Amazon, get next day shipping, and make your own cup of joe at home for pennies?

It's nice to get out out of the house and life doesn't always have to be about saving every penny.
You don't drink at home alone do you, just so you can get alcohol for pennies?

topr8




msg:3292544
 1:09 pm on Mar 25, 2007 (gmt 0)

It's nice to get out out of the house and life doesn't always have to be about saving every penny.
You don't drink at home alone do you, just so you can get alcohol for pennies?

i know slightly off topic, but i agree with jessejump, this is where bricks and mortar can score over online, although i suspect it applies more to smaller companies.

>>Borders could go out of business while trying to figure out their web retailing infrastructure.

yes they could but if they don't they'll always be slaves to amazon

wheel




msg:3292665
 4:54 pm on Mar 25, 2007 (gmt 0)

>>>> I Robot: Why go to the bookstore when you can pay half the price at Amazon, get next day shipping, and make your own cup of joe at home for pennies?

Couple of reasons. First, up here in Canada, Amazon isn't half price. In fact, by the time I've paid shipping on the books I buy, buying online is actually more expensive. So I don't save any money. In fact, my local indie bookstore gives me a 10% credit on everything I buy. The online vendors just don't compete on price.

Secondly, as a fairly heavy book consumer, and someone who uses them for entertainment, saving a buck or two on books isn't really an issue. Who'd think that saving $1 on a movie was a good idea, if the movie sucked? As I noted, my local bookstore knows my tastes. And researches books for me. So when I walk in, I say 'got any books?' and the response is a walk over to the sci-fi section and she starts pulling out books she's brought into stock with me in mind. Contrast that with a trip to my local monster book shop. The 18yo's just came from working the cell phone booth at the mall, all they know is where the sections are located. That difference in service is something I'm actually willing to pay money for. Again, not that I have to - I buy locally cheaper.

Thirdly, I buy books on impulse. I don't research the heck out of them. It's friday night and I want some reading for the weekend. No time for anything but the local bookstore.

What actually compounds all this is the fact that with the kind of service I receive, I end up buying 3-4 books everytime I go in, not the '1' I went in for.

All that being said, there's a time and place for the big and online folks. Computer books are a good example. Commodities, and relatively expensive. Online is great for that. (I still buy this stuff locally, but that's my loyalty speaking). What this situation illustrates is that there's coming new niches available for smaller bookstore players. I read somewhere that niche stores near walmarts actually do even better when walmart comes to town. I think this is the same.

This 33 message thread spans 2 pages: 33 ( [1] 2 > >
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