Tuesday, February 15, 2011

Bankrupt and Broken: Will Borders And Books Survive?

Borders is filing for bankruptcy any day now. The #2 bookstore operator in the US (after Barnes & Noble), Borders Group runs more than 500 Borders superstores in about 45 states and Puerto Rico, as well as about 175 small-format shops under the Waldenbooks, Borders Express, and Borders Outlet banners.

So what does this mean to your favorite (or second favorite) bookstore in your nearby mini-mall? Well, maybe nothing, maybe everything. In a press release dated 27 Jan. 2011, Borders announced they would receive some financing from GE Capital Restructuring Finance who will provide a $550 million infusion of funds. In the same release Borders acknowledged one of the goals is:

‘Borders' finalization of a store closure program comprising the identification of underperforming stores that will be closed as soon as practicable.”

The company employs approximately 19,500 people throughout the U.S., primarily in its Borders and Waldenbooks stores. It is headquartered in Ann Arbor Michigan, a state already hit hard by the recent global implosion, real estate bottom out, and slumping auto trade.

Another stated goal of Borders is to:

Aggressively reduce costs across the business, including costs in the supply chain network and store portfolio.

Since we all know the largest cost in a business is labor, labor is first to go.

The official line is that Borders failed to “keep up” with the e-book market, and I suppose they know their business better than I. But I also think this could be what my wife and many other bibliophiles fear…the beginning of the end of the conventional book.

Borders new plan is simply to be more like Amazon.com by:

Continuing to expand and enhance the Borders Rewards Plus program;
Strengthen the company's position as a purveyor of content by aggressively growing Borders.com and eBook market share;
Expand and enhance the company's overall retail mix, including non-book offerings, to improve profitability and offset the digital effect;
Make strategic investments in IT to improve the customer experience.

Either way you look at it everyone is moving to a Kindle or Nook and conventional books cannot sustain a very large company. Books are not the only products that Borders sells of course, but they do need it to stay in the black overall.

Here is a good HubPage on the subject of E-book v. Paper Books

And a decent blog about them.

With declining readership as a whole in America, and a faster and faster media world, it is likely this will be only the first bankruptcy we see in the publishing and conventional book and print media world. Many companies have diversified products and turned to the Internet for a cheaper and faster means to profits.

As the price of paper, oil, production, etc increase paper books will possibly be more expensive, both monetarily and environmentally to produce. The delivery method for e-books and periodicals, and the paper saved are pluses.

Some recommendations I would give to all producers of e-book readers is to start looking into alternative and sustainable methods of production. Plant resin plastic, environmental batteries, and maybe even things like solar cells are all things that could easily be implemented. And the Coltan and other minerals that are destructively mined must be eliminated. Until then I would consider e-readers are not very sustainable, and maybe even equally or more environmentally destructive than standard paper books.

As for now paper books either are or can be easily adapted to a sustainable production method. Hemp or bamboo paper, soy inks, and environmentally friendly printers and printing techniques are all steps in the right direction.

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