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Borders end to have ripple effect across country
Question of the Day
NEW YORK (AP) - What happens when a pioneer like Borders goes out of business? Depends on who you ask.
A day after the bankrupt Ann Arbor, Mich.-based chain said it would seek court approval to sell off its assets and shutter its remaining 399 stores, everyone from publishers to consumers is assessing what it would mean if the company that started the big-box bookseller concept vanished. The move could have a wide ranging _ and different __ impact on everyone from authors to consumers to competitors at a time when the industry is desperately trying to adapt to a new generation of readers who’d rather browse on an electronic book or tablet computer than turn the page of a paperback.
The biggest changes could come to the book publishing industry: As Borders stores disappear, the bookselling landscape could rapidly change, forcing authors to look for other places to market their work.
Jennifer Romanello, executive director of publicity at Grand Central Publishing in New York who stopped sending authors to most Borders for book signings after they declared bankruptcy in February says she already looks for alternative places to promote their work.
“It’s one less outlet to use in promoting our authors,” she said. “There are still other things out there; we see if there’s an independent bookstore nearby. But the number of bookstores has been contracting, not expanding, so we’re selective where we send out authors.”
That ultimately could lead to more business for Barnes & Noble, a 705-store chain and one of Borders’ main competitors. In fact, while at first Barnes & Noble revenue could be hurt initially as shoppers flock to Borders’ liquidation sales, Barclays Capital analyst Alan Rifkin predicts ultimately the chain could gain $220 million to $330 million in revenue, or about 10 percent to 15 percent of Borders annual revenue if the chain closes.
Still, Rifkin said even though Barnes & Noble has more aggressively and successfully pursued the e-book space than Borders did __ with Barnes & Noble’s Nook e-reader and e-bookstore __ it still faces the same stiff competition from online retailers.
“As the demand for physical books continues to decline, the need for big-box physical bookstores will likely continue to decline as well,” he wrote in a client note.
That sentiment is being echoed by analysts and consumers alike who say the demise of Borders could close a chapter for bricks-and-mortar stores and open a new one for digital reading. To be sure, brick-and-mortar stores have not gone the way of the dinosaur, but some say it’s only a matter of time.
Adrian Sierra, 36, a real estate agent from Westchester, N.Y., for instance, walked out of a Borders store in Penn Station in New York without a shopping bag filled with books. He was, however, carrying his iPad.
“I’ll miss them,” he says, but, “I’m not going to buy another paperback in my life. There’s no reason to anymore.”
A growing number of customers like Sierra are the reason that Borders liquidation will most likely accelerate sales of e-books, said Forrester media analyst James McQuivey. He predicts e-book sales will nearly triple by 2015 to $2.18 billion, with the number of e-readers jumping from 10.3 million at the end of 2010 to 29.4 million by 2015.
“People who read a lot are not just going to suddenly read less just because 400 stores close,” he said. “With Borders out of the picture, people might think `If I’m not comfortable with digital shopping, browsing or buying, I might as well get comfortable with it.”
Simba Information senior trade analyst Michael Norris disagrees, saying that if Borders goes out of business, it might actually decrease sales of e-books since there are fewer places for people who buy e-books to browse and research new titles physically before they buy electronically.
“Bookstores are a tremendous vehicle for e-book discovery,” he said. “We’ve often tried to quantify the exact number of consumers who `mooch’ off of bookstores, who browse at a store and leave to order a book they find off their Kindle or iPad. It’s hard to quantify __ but we know it happens.”
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