Today was one of those days at the office. You know the ones. Nothing seems to stir beyond the hum-drum, and then, all of a sudden, the floodgates open.
No. Today’s news that the economic doctor – with defibrillator in hand – had finally glanced up at the clock and called the ‘time of death’ on Borders US was nothing unexpected. For the relatives and staff in the nearby waiting room; well, it was painful to watch. Borders US has been holding crisis discussions over the past few weeks with the ‘big six’ publishers its major creditors. The relatives can’t be happy with all of this. It simply went on too long with sickening inevitability. The same death throws were played out almost two years ago with fellow cousin, Borders UK. Will something come from the ashes of Chapter 11 protection of Borders US? Perhaps – perhaps not. Right now, what we do know is that some 200 of 642 stores will close.
As always, Publishers Marketplace was ahead of the posse after the court filing of bankruptcy in New York this morning, and it was quick to reveal the Borders US creditors list in regards to publishers. It revealed a patient in cardiac arrest for quite some time – a case of multiple stokes and seizures. It’s a medical record from hell that even your obese uncle feasting on burgers, fries and pizza for years could not have topped.
Penguin $41.1 million
Hachette Book Group $36.9 million
Simon & Schuster $33.75 million
Random House $33.5 million
HarperCollins $25.8 million
Macmillan $11.4 million
Wiley $11.2 million
Perseus $7.8 million
F+W Media $4.6 million
Houghton Mifflin Harcourt $4.4 million
Workman $4 million
McGraw-Hill $3.1 million
Pearson Education $2.8 million
NBN $2 million
Norton $2 million
Zondervan $1.9 million
Hay House $1.7 million
Elsevier Science $1.6 million
Publications Intl. $1.1 million
Either publishers today are so full of good faith and a wish that the never-ending circle of ‘let’s keep it in the family’ takes paramount importance over every the niggling whisper in the ear that says; isn’t it about time we reviewed our terms with Borders? It’s not shocking that Penguin at the moment is out to the tune of $41 million + in credit due from Borders, or that Zondervan are short over the coming months $1.9 million from the leather wallet, but there are smaller publishers owed a lot less and cannot survive long term without that $50,000 payment met.
How the fuck were Borders allowed to push the boat out this far – let alone actually manage to stay in business this long, order stock, maintain stock and pay their staff?
The reality goes deeper – and it is not exclusive to the book industry – it is what is wrong with banking and business, and got us where we all are now. Running a business has become arbitrary figures on paper and nothing to do with stress testing the real value of commerce in the here and now.
I’ve little sympathy with the $10+ million club – you bargained, you risked, you negotiated, and you extended credit on the proviso that it would all work out in the wash. Eventually, the sun would shine, and sure $40 million would become $30 million, and in turn become a $.
Publishing Perspectives garnered some opinion in New York at the O’Reilly Tools of Change conference among delegates. This was at least constructive – how do we fix this – can we – how do we move on?
Mark Coker of Smashwords suggested that borders could only save itself if it developed an e-bookstore like Barnes & Noble.
Robin Lenz of Shelf Awareness suggested Borders should consider the option of running a franchise operation – bring in individual booksellers in specific locales.
Richard Nash of Cursor, pointedly, said; “anything that needs to be saved isn’t worth saving” and that if Borders was to survive, it needed to radically scale-down.
Patricia Arancibia of International Content at US bookseller Barnes & Noble’s Digital Group, suggested something similar to Nash, and provided examples of what was happening in the Borders stores in Puerto Rico. “The one on the Plaza de Americas is the bestselling Borders in the entire world and the bestseller of Spanish-language books in the United States protectorate. These two stores in Puerto Rico have their own staff of buyers and they have an avid audience for their books and they sell very well. So what I suggest is they work together with some of the very interesting independent publishers in Puerto Rico, and with help from here, set up a co-op to sell titles in English and Spanish and provide for the whole island.”
There was a lot of discussion today of what Borders should have done – what they could still do to save themselves, but I got little sense from reading borders own statements that they could adopt anything of what the analysts were saying. In short, this was a company who so corner themselves – they had no visible plan of flexibility. That’s a problem affecting not just bookseller, but publishers in the challenges to confront a changing industry. It’s like travelling to the darkest places of the world and not bothering to inoculate against prevalent sickness and disease.
But the real scour of today wasn’t the intensity of the debate – or that we had seen the same reel of film was playing once again in another economic circumstance – but that so many could not see beyond the walls of their own industry. This sad story made Bloomberg, CBS, MSNBC, BBC World and many other networks, not because it was a publishing story, but because it was a story – and reflective of another industry struggling to adapt to changes in its own back yard by external forces. If the publishing industry cannot deal and adapt to changes in its own back yard, it is never going to deal with the current economic forces aligned against it.
Just as there is a commercial tragedy in the fall of a leading retailer in the US, I would have liked to have seen a great deal more discussion about the human tragedy in all of this. The consumer ends up ultimately with less choice – competition becomes polarised – and we gloss over the fact that 200 retail outlets, and maybe more, will close in the US, bringing untold distress and financial difficulty on so many families across the entire country.
Let us not forget those people tonight, who were the face of Borders US, whose futures are uncertain, not because they gave anything less, but because they gave everything their company allowed them to give.
If I have learnt one thing in retail business over so many years – it’s that the loudest voices repeat what has already been heard, but the quietest voices tell you what needs to be heard.
- Borders applies for bankruptcy (bbc.co.uk)
- Borders Files For Bankruptcy Protection, Will Close Up To 200 Stores (outsidethebeltway.com)
- A Complete List of Borders That Are Closing (slog.thestranger.com)
- “Borders files for Chapter 11, closes 200 stores” and related posts (quillandquire.com)
- Borders bookseller files for bankruptcy, plans to close 200 stores (pennlive.com)
- Borders files for Ch. 11 bankruptcy protection (sfgate.com)
- Borders Files Bankruptcy After Years of Market Losses (businessweek.com)
- Borders Files For Ch. 11 Bankruptcy Protection (newyork.cbslocal.com)