[note to the reader this article has been edited after it's initial publication in order to correct a few inaccuracies regarding the career and misrepresented advance that Mr. Santora received. Thank you Nick Santora for clearing up those egregious factual errors. ]
This is the first part of a two part article; the first part exploring the failure of Borders Books, the second part examining physical books as an art form.
As I write this, vultures are picking over the rotten meat of the Borders carcass, books, movies, music, and basically anything not bolted down to the foundation will eventually be sold. Since the company filed for bankruptcy on February 16, 2011 I had been anticipating what would eventually come to pass in July, liquidation. This prompted a flurry of business reports that explained how Borders was a company that moved too slowly through the digital age. They had trouble adapting and just like the Dinosaurs or the giant Sloth of South America, they died off. Even Borders themselves were quick to admit that.
The fact is that Borders had been facing headwinds for quite some time, including a rapidly changing book industry, the eReader revolution, and a turbulent economy. We put up a great fight but regrettably, in the end, we weren’t able to overcome these external forces.
-Mike Edwards, CEO of Borders
This arrived in my email box on July 21st and as I read this passage I couldn’t help but wonder if Mike Edwards really believed what he was saying or if he had just been given a really great scapegoat by the commentators on MSNBC. Those things played a part in Borders demise but there were other big factors as well, self inflicted factors.
I’ve worked for a lot of poorly run companies but Borders really took the cake as the worst. I joined their staff in November of 2007, a month after moving to Los Angeles, at first I was trilled to work for a company that sold my favorite art form, books. (More on books as an art form in part II) by March of 2008 it became abundantly clear that Borders was fighting off an army of angry Jihadist’s with NERF guns and tennis balls.
I’ve broken down their failings into six categories, each were pieces to a puzzle that when put together formed a picture of the Titanic as it split in two and sank to the bottom of the Atlantic ocean.
While Mike Edwards regurgitated the line about the eReaders, I never once heard discussion about their website. This is a website that launched on May 27, 2008. Yes, you read that right 2008 not 1998. Borders did not have their own website until eleven years after Barnes and Noble. From 2001 to 2008 Borders had a special arrangement with Amazon.com, when you went to borders.com (click here now to see the sad remains of a rotting corpse) you were redirected to Amazon.com. The only difference was a little Borders logo in the corner. Amazon acted as the distributor and Borders received a cut of the sales.
In 2008 they concluded that no other major retailers (let alone the second largest bookstore chain in the US) were using another company to act as their surrogate. So they established their own site, but by this time they were so late to the game they should have just pretended the internet didn’t exist altogether. The moral of the story, they should have had a fucking website ten years earlier.
In 2007 Borders was just beginning to sell the Sony eReader, which was fairly expensive, around $300 way more than the Kindle. They never sold well. The market was still relatively small and many believed that these electronic books would never catch on. They did, and up until the day I left in 2010 they were still pushing that Sony reader despite Amazon’s Kindle and the Barnes and Noble’s Nook.
This is what everyone refers to when they talk about the demise of Borders, they didn’t launch their own eReader until July 7, 2010, the Kobo. I was surprised to learn that Kobo is another company separate from Borders. Obviously they only sold this device for a year before the company wen’t under but I had to wonder if they hadn’t already learned their lesson with the website. Despite being late to the party on the eReader craze Borders decided to forge ahead with an inferior product and another misguided partnership. While this was certainly part of Borders overall sales problem, I don’t believe it was necessary for them to have an eReader.
3. the bookshelves
During the summer of 2008 it was announced that there would be a change in how the company stocked books. We would be carrying less variety and more quantity. What that means is that we would carry fewer different titles in the store but more copies of the titles we were carrying. To me this was one of the biggest fundamental mistakes of the company. You can buy bestsellers just about anywhere today, from Target, to Staples, even Best Buy, or your local drugstore. Amazon has mass quantities at dramatically lower prices than just about anyone, so when someone chooses to go to a brick and mortar store like Borders or Barnes and Noble they go because they are looking for a large selection of books they want today.
From the summer of 2008 on, Borders began to lose a valuable customer; the one who actually wanted to shop at Borders. It doesn’t take long for customers to catch on when you don’t have what they’re looking for in stock, before they start going to a different store.
4. employee happiness
If you don’t believe that the happiness of your employees effects your business then you’re either a terrible businessman or you’re the general manager at a Walmart. I stayed at Borders for just over three years because the economy sucked and I have a strong tendency to become complacent even in terrible work environments.
In the summer of 2008 it was announced that Borders would no longer be hiring full time employees. Full time employees were guaranteed between 35 and 40 hours and week and a better benefits package. All existing part-time employees (like myself) who were hoping to become full timers were shit out of luck. Aside from managers once you were part time you were only part time, forever. This quickly soured any good feelings there might have been between many of the stores part-time employees and a struggling Borders, in fact my store had a major exodus just two months after this announcement. At the end of 2009 hours were cut back so dramatically, it was not uncommon for the store to have just three employees on the floor during a Christmas rush.
From 2006 to 2011, Borders ran through three CEO’s. This constant change in leadership meant that every year or so you had to be retrained on a whole new set of core principals that most likely were not related to the ones you’d just learned. George Jones was the CEO from 2006 to January 5, 2009 when he was fired, in that time the economy was never considered good, and Borders business was not either. Yet George Jones still pulled in a $2.1 million salary every year. I suspect that this, and the fact that Borders did not have a website lent heavily to his firing.
Jones’ replacement was Ron Marshall, he’d never worked in the book business before and he ran the company that way. After just a year on the job he quit, coincidentally on exactly the same day as myself. Now he’s the CEO for a north eastern grocery store chain. Marshall’s replacement was Mike Edwards, yes the same Mike Edwards who wrote the statement above. He was doomed from the beginning, but if he was so willing to blame the companies failures on a changing book industry then there was nothing he could do to turn things around.
6. Borders Publishing
In 2007, the same year that Ron Marshall paid himself $2.1 million, the same year they cut back employee hours and stopped full time employment, the same year that many economists were predicting a second great depression, Borders opened their own publishing house. Technically this was yet another partnership, this one with Lulu Press. This was not uncommon, most major chains sell their own printing of public domain classics. It was less common for them to sell new books from unknown authors.
Actually, this could have been a cool idea, if they were publishing books people wanted to read. Could have, is the key phrase. Their first self published book was Slip and Fall by Nick Santora, he’d never written a novel before. In less than a year it was selling for $2 in our bargain bin.
The same goes for Borders second exclusively sold and published book, The Eighth Day by Tom Avitabile. Tom was supposedly a friend of George Jones who had no previous writing experience and hasn’t had any since. Borders couldn’t give away copies of his book, eventually I found myself in the stock room ripping the cover off the books to return to the publisher where they presumably were burned for fuel. I don’t know what he got for writing the book but Borders bought the film rights to the book for a reported $8 million. [according to my general manager at the time.] Needless to say The Eighth Day won’t be coming to a theater near you. I often wonder if that was the best way to spend the companies money, especially during a rapidly changing book industry, the eReader revolution, or a turbulent economy. The only smart thing you could say about Borders Publishing was that they only published two books.
I could go on and on about Borders failings they were not limited to these six, but it was these six that played the biggest roles. Cd’s, DVD’s and the Borders Rewards Plus program were disastrous as well. External factors played their role but much of what caused their historic collapse was self inflicted. It seems that at almost every critical juncture Borders made the wrong choice and you can only make so many wrong choices before Mr. Liquidation comes-a-knocking at your door letting you know that you made your last wrong choice.
As a lover of books and someone who one day hopes to have a book that will be sold on the shelves of American bookstores, I don’t revel in the loss of Borders. In the end this may only mean marginally better profits for Amazon or Barnes and Noble, it may mean slightly better profits for local independent bookstores. The price of physical books might rise, beyond that I doubt that consumers will even notice Borders absence. If you’re one of the “many” people I’ve seen commenting on articles, begrudgingly migrating to Barnes and Nobel, rest assured, they’re no different. Anyone who says any different is just kidding themselves.