Borders

The Demise of Borders

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Ryan Beltram, EDN

If you’ve driven past the Oakway Mall recently, you may have noticed Borders has had a lot of customers.  Typically that would be a great sign that business is doing well, but as most of us know, not in the case of the once giant book retailer.  According to an employee at the store, Borders plans to close some time in September.  More than 40 employees will have lost their jobs with the closure of the store that ironically started out as a used bookstore in Ann Arbor, Michigan.

The company officially  announced it  was bankrupt in  February and in July it was unable to find a buyer before its July 17 bidding deadline.  On July 22, the company began liquidating its remaining 399 stores including the one in Eugene.  But  you won’t get any sympathy from local bookstores in the Eugene area about Borders going under.  Tsunami Books owner Scott Landfield says a little  adversity in the book industry is normal.

“We’ve essentially been bankrupt for 15 years and we continue to work hard to keep our store open.  It’s unfortunate what’s happened to them, but I think them closing helps bring the focus back to buying local.”

When the last store sells its last book, Borders will have closed more than 500 stores and laid off thousands of employees as the big-box bookstore joins Blockbuster, Circuit City and Linens ‘n Things as victims of the recession.  But where did Borders go wrong?  Sure the recession had a significant impact on the demise of the company, but there were other factors that lead to Borders failing.

A good business anticipates changes in the way people consume their products and they act accordingly to ensure the business remains profitable.  In the early 2000s, Borders did the opposite of anticipating a new trend and they paid dearly for it.  In 2001, Borders turned over its internet operations to Amazon because its online business was losing money.  For the next seven years, it outsourced its online sales to Amazon and would only get a percentage of sales from Amazon in profit.  According to the company’s 2000 annual report, they envisioned Borders.com as nothing more than a convenient channel for customers.  No ability to purchase books straight from the website, just a place to be reminded of what they have.  Think of it as a place where you can look at the merchandise but you can’t touch it or take it home with you.

In the seven years that Borders decided not to profit significantly from online buying, Amazon went from being merely a book-buying site to becoming one of the leading online retailers.  According to Internet Retailer, E-commerce stocks rose 36% in 2010 and as web-only companies, Amazon ranked number one.  It wasn’t until 2008 that Borders announced its marketing alliance with Amazon was over and that they would be launching their own web sales site.  But by then it was too late.  Companies like Amazon and Wal-Mart had become leaders in book-buying retail and even Borders bookstore chain competitor, Barnes & Noble had focused on online sales years ago.  But it wasn’t just the internet that Borders was last in capitalizing on.

A trendy new gadget called the e-reader was introduced by Amazon in November of 2007 when they debuted the Kindle.  Barnes & Noble introduced its Nook, now sold in Wal-Mart and Best Buy, in November 2009.  Apple’s iPad came out in April 2010.  Borders decided to wait until 2010 to release their own e-reader device called the Kobo.  But once again it was late to the party.  By July of 2010, Kindle book sales had surpassed hardcover book sales, and then six months later beat the paperback books sales rate.  The Nook while not as popular as the Kindle, boosted sales for Barnes & Noble during the holidays last year.  Everyone I know has either a Kindle or a Nook.  Who’s heard of the Kobo?  Whether or not it’s a better e-reader than the more popular devices is irrelevant.

Another area that the company failed to identify was the changing CD and DVD market.  In the 2000s, it generated hundreds of millions of dollars in sales of CDs and DVDs, and it expanded those sections in its stores.  But by the mid 2000s, companies like iTunes, Netflix and other file-sharing networks became popular and places like Virgin Records and Blockbuster saw declining revenue.  The same forces killing the bookstore now were doing the same thing to the music and video industry five years earlier and Borders did not anticipate that same fate for books.

The last factor Borders failed to correct was too much expansion.  It opened too many stores and signed too many 15-to-20-year leases, making it more difficult to close unprofitable locations.  The Eugene location has two more years left on its lease and whatever business follows will likely not be another big-box chain but rather several smaller businesses to fill the large space.

Looking at the facts, the main culprit in Borders demise was the internet.  The retail industry has become a challenging business, regardless of what you are selling, but in order to succeed you have to see changes before they happen and adapt.  Barnes & Noble looks smart now having recognized the trends in bookselling–the internet, e-readers, scaled-down stores as apposed to big-box stores.  But they may have delayed the inevitable themselves having announced bigger-than-expected losses this year.  Despite a rise in revenue thanks to digital sales, Barnes & Noble is struggling and for a company up for sale, the future does not look bright.

But at least they’ll still be here during the holidays.  All those customers going in and out of Borders right now will be gone come Christmas and the 25,000-square-foot space will be deserted.

July 25 – Morning Headlines

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July 25 – Morning Headlines

Listen to the Morning Headlines:
Morning Headlines with Steve Kaye

Headlines

  • Police High-Speed Pursuit Lands Two In Jail
    Two people taken into custody early Monday morning after leading police on a 45-minute chase.   It started in Springfield just after 2:30 a.m.   An officer attempted to stop a driver at the intersection of Bob …
  • Burglars steal $30,000 in guitars, cash from Eugene restaurant
    Thousands of dollars in cash and collectors items is missing from Mac’s Restaurant & Bar in Eugene after an early Sunday morning burglary, now the restaurant is asking for the…
  • Eugene police swarm Ferry Street late Saturday night
    Eugene’s Ferry Street was crowded with police Saturday night as a variety of loud parties lead to a car being stolen and a high-speed pursuit around the University neighborhood. Witnesses say that one police car was stationed outside one of the h…
  • Carnival ride regulation revisited
    It’s the height of festival season and for many kids that means thrills — as in the Zipper, the Sizzler or the Tilt-A-Whirl. But who’s making sure those traveling rides are properly maintained, set up and operated? In Oregon, the answer…
  • Competing Company to Buy Eugene Borders?
    The story of Borders bookstores shutting it’s doors might have a different ending than expected– at least for the location in Eugene.   That’s because according to published reports, Books-A-Million, an out-of sta…
  • Area northwest of town could become urban
    Eugene’s lengthy planning effort is moving from the theoretical to the practical. City planners have contacted property owners northwest of the city to gauge their interest in becoming part of Eugene someday. Read more in Monday’s Register-Guard. …
  • Eugene Emeralds lose 3-0 to Everett AquaSox, fail to clinch playoff spot
    The Emeralds stranded four runners on third base, hit 0 for 14 with runners in scoring position and had runners on base in eight different innings and still failed to score in a 3-0 loss to the Everett AquaSox Sunday night in front of a sold-out crowd …

 

Tim Chuey Weather:

Goodbye to Summer heat, hello to more clouds and cooler temperatures.

An upper level high pressure ridge (“Arch” shape) has moved over the Pacific Northwest giving us the Summer heat and sunshine that so many of us have been waiting for. An upper level trough of low pressure is rolling in behind the ridge now and with a weak frontal system (shown offshore) will bring us more clouds and cooler temperatures. Will it bring just clouds or will we get showers too? So far it looks like just the clouds. More  disturbances will approach us by the end of the week.

Mostly cloudy and cooler today, partly cloudy this evening, mostly cloudy tonight and Tuesday AM, a mix of clouds and sun Tuesday afternoon, mostly cloudy in the evening, partly cloudy Tuesday night, a mix of clouds and sun Wednesday, then partly cloudy Wednesday night highs 76-74 warming to 78 Wednesday lows 53-47. Partly cloudy Thursday through Sunday highs 77-81 cooling to 76 Sunday lows near 50. (seasonal averages high 83 low 51)

Because weather forecasting is a combination of science, intuition, and timing there can be no absolute guarantees that individual forecasts will be 100% accurate. Nature is in a constant state of flux and sudden unexpected weather events can happen.

Keep Current on the Weather: timchueyweather4u.com

July 19 – Morning Headlines

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July 19 – Morning Headlines

Listen to the Morning Headlines:
Morning Headlines with Steve Kaye

Headlines

 

Tim Chuey Weather:

The clouds and wet weather will hang on through midweek, then the sun will come back and it should warm up through the weekend, we hope.

An upper level trough of low pressure (“U” shape) has moved in along the coast and will keep us alternating between periods of clouds and cooler temperatures, and rain or drizzle and even a thunderstorm thrown in for good measure, then back to less cloudy and slightly warming temperatures until late in the week. A frontal system moving through California and will spin some showers at us to the North. We could see a change in our weather pattern over next weekend, but it is too soon to get too excited about it until there is some hard evidence it is possible. A new frontal system aims at the Pacific Northwest on Sunday. That could put a “damper” on the potential sunshine and warmer weather for all of next weekend.

Forecast for the Southern and lower Mid Willamette Valley including Eugene-Springfield and Albany-Corvallis: Cloudy with a (40%) chance of showers this AM, partly cloudy with a slight (20%) chance of showers in the afternoon (0.10 in. of rain possible), partly cloudy tonight, a mix of clouds and sun Wednesday, mostly cloudy with a slight (20%) chance of showers late Wednesday night and Thursday, partly cloudy Thursday night highs 72-76 cooling to 72 Thursday lows 52-49. Partly cloudy Friday through Saturday AM, mostly sunny Saturday afternoon, mostly clear Saturday night, then mostly sunny Sunday and Monday with mostly clear nights highs 76-80 lows48-52. (seasonal averages high 82 low 51)

The Pollen forecast for the Eugene/Springfield Area is for trees and weeds to be low, and Grass to be moderate. (Provided by Allergy and Asthma Research Group).

Because weather forecasting is a combination of science, intuition, and timing there can be no absolute guarantees that individual forecasts will be 100% accurate. Nature is in a constant state of flux and sudden unexpected weather events can happen.

Keep Current on the Weather: timchueyweather4u.com

Borders Book Stores Closer to Liquidation

By Rick Douglas

 

The Borders book chain looks to be one step closer to going out of business. Sunday was the deadline for final bids and the only company not looking to liquidate the chain declined to bid. That means the company now faces a sale to liquidators.

 

Borders must still get final approval of any transaction from bankruptcy judge Martin Glenn in New York City. On Friday, Glenn approved a procedure to allow the liquidators to buy Borders’ assets if others didn’t enter a bid by 5 pm eastern time, Sunday.

 

Is there still a place for local bookstores?

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Is there still a place for local bookstores?

– Ryan Beltram, EDN

In Fahrenhiet 451, Ray Bradbury wrote a story about a  frightening vision of the future where firemen don’t put out fires–they start them in order to burn books.  Bradbury’s society in the book believed that the appearance of happiness is the highest goal and that books give us knowledge and ideas that ultimately will influence us negatively. But in our own future, will we have any books to burn at all?

The nations second-biggest book retailer, Borders, filed for  bankruptcy in February and has already begun  closing 30% of its more than 600 stores.  The  Waldenbooks store at Valley River Center will also be closed soon, but what about local  bookstores?  The number of independent bookstores  has been declining for some time, from about 6,000 in the early 1990s to about 2,200 today, according to the American Booksellers Association.

“Are we an endangered species? Probably.” said Peter Ogura, owner of Black Sun Books.  “The most challenging times have been the last couple of years because of declining sales.  There are so many ways people can buy books now and I have not been particularly good at doing everything that I can to sell books online.” Despite being open for nearly 20 years, Ogura can understand the appeal of staying home to shop for books.

“It’s pretty simple but it takes away from  options in your community for sure.  If paying the least amount of money is your goal then you can always shop Amazon or Walmart. In the end it’s going to have an impact on local businesses and I’m not sure we will survive.”

In a digital world where everything is right at our fingertips whenever we want, the idea of leaving our home computer and driving to a store is becoming less attractive.  The music business was the first to feel the affect.

In 2009, the Virgin Megastore in Manhattan’s Times Square, said to be the largest record store in the world, closed its doors.  Last year, Portland’s Sheet Music Service store closed after almost 100 years in business. The end of music and record stores were due in large part to consumer’s ability to buy music from sites like Napster or iTunes and then download their music onto their computers and then onto small, portable MP3 players.  No need for CDs, tapes or records anymore.

Next to go were video stores.  Blockbuster, the leading video-rental chain filed for bankruptcy in September of 2010 due to debt and their inability to compete against Netflix, which mails movies to subscribers and also provides digital streaming and Redbox, which operates movie-rental kiosks at a cheaper price.

The demise of Borders has been a result of crushing debt and  their inability to successfully navigate rapid changes in behavior in  consumer’s spending habits.  Those new spending habits include the purchase of electronic readers or e-readers such as the Amazon Kindle or the Nook which is made by Border’s competitor, Barnes & Noble.  According to a report from the  Association of American Publishers, e-book sales in the month  of March increased by 145.7% from January of 2010. Compare that to hardcover books which saw an increase of only 6% from  last year.  Paperback books decreased in sales by nearly 8% in the same time span.  E-book sales have increased annually and significantly in all nine years that the AAP have been tracking the category.  But there is still an admiration and passion for books, particularly in local bookstores.

Lauren Kessler, Director of the Literary Nonfiction graduate program at the University of Oregon, thinks the appeal of local bookstores is the other things they offer. “There’s always going to be a hardcore group of people, and I’m one of them, who love bookstores and libraries.  The way artists love museums.  If bookstores want to succeed they have to give people reasons to come to them other than, we have a bunch of books and you should buy them. I do a lot of touring for my books and I go into bookstores all over the country and the ones that are vibrant today are the ones that have events.  There is a reason for people to go there.  They have author events, stuff for kids and community events related to books.”  Kessler, who has written six books herself, also believes that a book holds more value than any form of digital content.

“Books are an artifact.  The art that is done for book covers, the feel of the paper or the type style.  All of those things are like a piece of art.  Either you think of books as little works of art or you think of them as vehicles of information or entertainment. I have three children and none of them have e-readers and they’re not interested in them because they spend so much time on a computer anyway so it’s like a relief not to have a screen in front of them.”

In December of last year, Google eBooks launched its long-awaited electronic bookstore.  It immediately became the largest e-book provider in the world, according to Publishers Weekly, with almost 3 million books, including more than 2 million titles available for free.  The program offers options for independent booksellers to sell Google’s books on their websites without having to invest in expensive software platforms. This may spell good news for local bookstores trying to embrace the digital age.

But others in the independent book world like things the way they are.

“Why would anyone pick up a guitar or  a drum again when they can create a  whole orchestra digitally,” said Scott  Landfield, owner of Tsunami Books. “Why would anyone do anything when they can sit in front of a screen and appear to be doing something.  I have  people come in here and they want to  tell us their whole life story because this is a safe environment.  We’ve got to  have that interaction with people particularly if we’ve been behind a computer all day.”

Landfield is proud to say that despite some ups and downs, his business has been able to survive because of his loyal customers.

“We started with no money.  Our challenges have never ended.  We’re the only business that I know of that started 15 years ago with no money and is still a business.  I have nothing if nobody comes in here.  There’s a lot of wise people in the book industry but no one really knows in 5 years how this business is going to change.  The month Borders came to town my partner and I planned and made a move to advertise and our business took a 50% jump.  That was a cataclysmic move, the ultimate bookstore coming to town.  You don’t try to battle with them, you find your own niche and go for it.  People want to keep us open because it’s a traditional thing.  New is not always better.”

The independent book scene isn’t doom and gloom everywhere though.  San Francisco is a place where independent bookstores are not only surviving, but thriving thanks to a city of readers who view books not only as pleasure, but as a cause.  According to the Bureau of Labor Statistics, San Francisco is the only city in the country that ranks in the top three annually in consumption of both books and alcohol. It remains to be seen what will happen here in Eugene.

Lauren Kessler is optimistic.  “I still think bookstores will exist.  You go to browse, to get ideas.  One of my friends is totally into vinyl and there has been this whole resurgence of vinyl lovers.  Why would there be?  Albums are big, they scratch, you have to put them some place and go to a store to buy them and he appreciates them as artifacts and I think the same goes for books.”

Tsunami Books
2585 Willamette St
Eugene, OR 97405
(541) 345-8986
www.myspace.com/tsunamibooks

 

Black Sun Books
2467 Hilyard St
Eugene, OR 97405
(541) 484-3777