Adapt or Die

by Dennis Sanders on July 21, 2011

A fellow Michigander notes that his Kindle didn’t kill Borders, bad business decisions did:

The most-cited reason for Borders downfall will certainly be technological change. The Nook & Kindle e-readers both will be portrayed as the grim reapers for Borders, and bookstores in general. That may contain a kernel of truth, and is even more convincing when you throw in competition from online booksellers like Amazon and big box stores like Costco (their selection is always surprisingly robust). Detroit Free Press writer Mitch Album spent his Sunday column listing other factors, including the decline of books as an essential part of our culture. Absent Twilight & the Harry Potter series, and excluding homework assignments, how many American kids are devouring books? For that matter, how many of their parents use time after work to wind down with a book? Not many, it seems.

But I didn’t kill Borders, and neither did my Kindle-loving brethren – bad business decisions did. In 1992, Borders was sold to Kmart, which then merged it with Kmart’s Waldenbooks and started franchise expansion. Borders became a public company in 1995 and reached its sales per square foot peak in 1997 – at 204 stores – but kept opening new stores. It expanded overseas and failed to capitalize on growing (non-expansion) revenue streams, most notably in 2001 when it gave Amazon all of its online book sales. Instead of being conservative with expansions – even downsizing – as the market landscape changed, Borders kept pumping revenue up with store openings. On April 18, 2011 the truth was clear: Borders hasn’t been a truly healthy company since the late 1990s and now nothing can save it.

 

Like Gordon, the closing of Borders has kind of been a gut punch for me.  In someways it seems silly to get all emotional about a big box chain.  But Borders was a Michigan company that started in Ann Arbor.  There was something that always made me swell a bit with pride about this homegrown company making it big.

But Gordon is also correct that the company made mistakes that contributed to its demise.  It will be sad to see this great store pass into history, but it ultimately has only itself to blame.

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