Borders, the bookstore chain that once ruled American malls and shopping centers, filed for Chapter 11 bankruptcy yesterday and announced it would be closing 200 of its sprawling stores. In Forbes, Mya Frazier says there are are three lessons to be taken from the Borders bankruptcy: 1) "All Goliaths eventually become Davids"; 2) Retailers must adapt to new technologies or be "swiftly" punished; and 3) It takes more than marketing to save a struggling business. Here, a brief excerpt:
We are currently in the chain-store era of American retailing. It’s an era defined by its vicious and inevitable churn. And the bookstore category is no exception. As recently as two decades ago, one out of two books were sold in a bookstore, according to research firm Ipsos. And there were once as many as 5,000 independent booksellers in America.
In the '90s when Borders and Barnes & Noble went on a growth tear and consolidated the market, the independents lost share to the big-box chains and shuttered by the thousands. And then the mass-market retailers got into the bookselling business too. Whereas Borders and Barnes & Noble were once the Goliaths — the evil big-box chains driving competition and undercutting smaller independents — the Costcos and Wal-Marts of the world began undercutting the bookstore chains. With more than 600 stores, Borders was certainly big in its category, but up against this new competition, it was facing an entirely new form of competition from an entirely different retail category. The staggering capacity for volume at these mass-market retailers, combined with the exploding growth of digital book sales at Amazon.com, proved too much for Borders. And since the product — books — are manufactured by a publishing industry that doesn’t really care where its books are sold, as long as they sold, that means pricing pressure will continue to remake the competitive landscape.
Read the whole thing in Forbes.
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- Watch out, China — America is working on dogfighting drones
- How liberals are unwittingly paving the way for the legalization of adult incest
- How to be the most productive person in your office — and still get home by 5:30 p.m.
- How the Simpsons/Family Guy crossover revealed the worst of both shows
- 43 TV shows to watch in 2014
- The troubling persistence of eugenicist thought in modern America
- Why America won't have enough money to battle ISIS
- Why the Chinese military is only a paper dragon
- 6 things the happiest families all have in common
- Libertarianism's terrible, horrible, no good, very bad idea
Subscribe to the Week