Borders Liquidation – An obituary
In 1997, walking on Oxford Street in London I accidently stumbled upon the newly opened Borders book store. It was early summer and a short shower had caught me without any cover against the elements and this store (wasn’t even sure if it was a bookstore) with its red and white logo looked quite attractive. Since I was a Foyles fan (Tottenham Court Road), I didn’t get the British edition of a US chain at first. To that add the years of seclusion coming from a city without a large format bookstore. I stepped in and stepped out as soon as it stopped drizzling outside.
A few years later while browsing and searching for XML related reference material in a New York at a time when hardly anyone understood what the 3 letters meant I had my second serious exposure to Borders – this was the 116th and Broadway edition at Lerner’s Hall – the Columbia University on campus bookstore. After looking through both Barnes and Nobles and Borders I finally found something that helped at the local Borders. But it was finally our last summer in Southern California when I truly started to appreciate Borders. The South Coast Plaza drive store became a regular haunt and I spent hours at the store just browsing through the business section post Avicena, trying to find meaning in the loss that I had just suffered. Borders expansion in Dubai in 2007 allowed me to run meetings at the coffee shop, while Amin browsed through Tintin comics in between us catching back to back movie shows at the Cinestar next door.
While a lot of things went wrong for the chain, one wonders if the original founding team had still run the store and never sold out would Borders still meet this fate. What is it about expanding outside the US and selling out to private equity investors that serves as the kiss of death to large format retail chains? Was it a case of private equity investors driving this business into the ground because they simply didn’t understand the franchise or was it their ill timed international expansion when the rest of the world was shutting down? Borders in its bankruptcy filing officially mentions unprofitable stores (250 plus), management churn (4 CEO’s in 4 years), the growth of online book sellers, missing the e-book boat and onerous lease terms for its failure. To me it sounds more like a strategy consulting driven expansion gone south.
I guess we have to wait for that HBR case study to come out before we can vote on what really killed a great franchise.
Adios Borders, sleep well old friend.