The seemingly inevitable collapse of Borders has occurred, and according to news reports, sales of various individual stores could begin within a week. This unfortunate event, and it is unfortunate for the 11,000 employees who will lose their jobs, for the authors, the publishers, and the entire book and publishing industry, not to mention millions of readers, is the result of years of bad management, mismanagement, and, at times, apparently no real management. And had anyone at Borders listened ten years ago, it wouldn’t have had to happen.
There are two aspects to the bookselling business that Borders repeatedly ignored, despite advice to the contrary from professionals at all levels in the field [including my comments in the past here, for all the good they did]. The first maxim applies to most retailing, and that is that to be successful, you have to expand or at least maintain sales levels at every outlet – not necessarily in every line of merchandise, but at each and every store. Sales drive success. Period. That also means you can’t sell what you don’t have, yet for the past five years or so, Borders has continued to reduce the range and the inventory of books carried, while expanding or maintaining non-book items [and taking a huge bath in recorded music]. For a bookseller, that’s idiocy.
Second, you have to understand your product and your customers. Yet, so far as I can determine, every CEO Borders has had over at least the past ten years has either been an accounting type or an executive from a field totally unrelated to bookselling. At one time, according to my industry contacts, the head buyer at Borders for F&SF had been a hardware buyer specializing in hammers, with no experience in books. By comparison, one of the most successful book publishing firms in the past generation has been Tor/Forge, which grew from a start-up to an industry giant in two decades – and it was founded and remains controlled by Tom Doherty, who began as a junior book salesman. Although Tom is a highly literate man who can also line edit a book with the best, he understood sales… and it’s more than clear that the Borders CEOs didn’t.
Unlike almost any other commodity sold in large numbers in the industrialized world, books are unique in that each novel, even novels in a series by best-selling novelists, is different from any other novel. The differences may range from rather minor to enormous, and the range between different books by the same author also differs greatly from author to author. Successful booksellers know this. Successful chain booksellers design systems that at least try to take this into account. Borders’ systems were never as successful in this regard, and they often underbought, and then had to re-order, losing sales in the process because, simple as it sounds, they didn’t seem to understand that basic point that you can’t sell what you don’t have… or the fact that, on average for most authors, more than 50% of a new hardcover’s sales occur in something like the first eight weeks.
Borders also acquired Waldenbooks, at the time a successful and profitable mall store operation of some 1,800 outlets… and promptly began to try to run Waldenbooks on the big-box model. When that didn’t work, they cut inventory, and did so in ways that were counter-productive. For example, because a large percentage of mall store customers are impulse buyers, someone who enters the fiction section will generally look for the latest release by a favorite author or the first book in a series [or a stand-alone novel] if that reader doesn’t see the latest “favorite” book. The “new” policy at Waldenbooks, forced by the accountants, was to carry the latest novel in a series and not much else, leaving the impulse buyers, particularly in romance, thrillers, and F&SF even more limited choices… and reducing sales.
Now… why should you believe my observations? Because over the last fifteen years, I’ve physically visited almost 40% of all the B&N stores, more than 35% of the Borders stores [based on their largest number], and over 20% of the initial number of Waldenbooks. I’ve walked the aisles and talked to the booksellers and customers… and still do… and I’d be astonished if any member of senior management at Borders has been in as many stores over as many years as I have been – and it was their business. There was essentially no difference between the store personnel in Borders stores and those in B&N stores, at least until the end, but there were enormous differences in corporate management.
It’s also fair to say that Borders was hampered from the beginning by a number of very bad policies. First, although this changed somewhat in the last five to ten years, when it was a case of too little, too late, the initial store layouts of the Border’s stores resembled larger versions of small cozy bookstores. That is fine for small cozy bookstores, but the larger the early Borders stores got, the harder it became to find books [and wayward children]. Then the initial Borders policy of separating hardcovers and paperbacks effectively depressed sales and irritated many readers. Borders locations were, generally, somewhat harder to find – and I know, because I was trying to find many of them with a rental car, a map, and telephone directions in city after city.
For all of that, I’ll miss Borders, and so will millions of readers, because there are all too many places in the United States where the Borders was the only bookstore with a wide selection, and the loss of such stores will become another factor chipping away at American literacy. The loss of sales will likely cut short the careers of a number of low midlist authors whose sales were borderline, and it will certainly hurt the revenues of traditional publishers, but in the short run it will impact most all those hard-working booksellers who loved books and will now face a far grimmer economic future.