Today I will be talking about Borders, a bookstore company that had closed its doors permanently in 2011. Borders use to be very popular and a dominant figure in the book store industry. It had become so popular that it seemed like every town you went to there were a McDonalds, Walmart, and Borders. Growing up I was a big fan of books and comics . To hear of Borders announcement of going out of business came as a big shock to me. I remember back in high school and even college I would often go to Borders. Some times to study for class, but usually I would spend hours loosing my self in the countless shelves of books. So you could say that I was a little up set to hear that Borders had closed its doors for good. It was kind of funny because only after Borders had closed did begin to notice the numerous unique bookstores around me.
It has been 45 years since Borders opened their first bookstore in Ann Arbor, Michigan. When they first entered the industry of books, the market was different then. For years Borders had acted as if nothing had changed, they were oblivious to the need for change. In Borders final days they even tried to buy out a competitor of theirs, Barnes and Noble. But it only made them look desperate and everyone knew that they couldn’t really afford to buy them out.
Here are some reasons as of to why Borders went bankrupt and Barnes and Noble thrived:
- Borders didn’t implement eBooks soon enough: Borders was blind to the rise of eBooks becoming a big thing in the market. Companies like Amazon and Barnes and Noble saw its value before Borders, jumping all over the portable eBooks like Kindle and Nook. Borders on the other hand only opened up an eBooks store online a year before their business was ran into the ground.
- They were too big: Borders expanded too large for their company to handle. At one point they were employing 19,500 people. Everywhere you went you would see a Borders books store. Most of their stores were competing with local Barnes and Noble bookstore, even though Borders offered a wide variety of books, people still took to the internet to purchase their reading material.
- Too late to gain an online presence: For a while Borders had outsourced its online book selling to Amazon. Anytime you visited their website you were redirected to Amazon. At first this seemed to be a good idea because Amazon was a fast growing prominent online company, but this was a bad idea. Amazon had damaged Borders branding strategies and stolen a good portion of their customer base.
- Stuck in dept: For years Borders had carried a huge dept and when the recession hit in 2008, things didn’t turn out so well for them. In 2008 they had attempted to drag themselves out of a $350 million hole, by reconstructing their business twice. Sadly to say their efforts were futile, they never could manage to ascend due to the damage their poor business practices had put them in.
- Invested too much into selling music: In the 90s Borders wanted to not only sell books, but also become a multipurpose entertainment store. So they began to invest a lot of money into selling CDs. Turns out this was another bad decision, no surprise there. Around this time people had began to loose interest in CDs and began purchasing and downloading music offline, either for their new mp3 players, like iPod. This forced Borders to eventually reduce their music inventories, making them realize their expensive retail space was more than what they needed.
If you read my previous post, you will notice many of the mistakes Borders made were common errors. Hope this will serve as a lesson to any business or aspiring entrepreneur. It sure has taught me a lot.
Check back with me tomorrow for some more awesome content.