Stuck Between the Internet and eBooks, Borders Bookstores Struggling to Survive
Just over a month after cutting ten percent of its workforce, troubled retailer Borders (BGP) has reportedly started yet another wave of layoffs.
The Daily Finance quoted "multiple sources" that last Thursday, the big book and music chain "instituted a company-wide layoff of all inventory supervisors, and also let go an unspecified number of part-time employees."
More layoffs expected over the coming days, which raises the question of when -- or if -- the big company can pull out of its current tailspin.
The company recently got its third CEO in a year, and over the past week was also reportedly asking a group of lenders led by Bank of America to grant it more time to repay the next installment of a $360 million loan set to mature in mid-2011.
All these moves appear part of an increasingly desperate play to avoid bankruptcy. The nation's second-largest book retailer, which employs around 25,000 people, has had trouble adjusting to multiple threats over the past decade, from the online dominance of Amazon, the offline challenge from Walmart, and the rise of eBooks.
Over the recent holiday period, for example, Borders' sales fell 13.7 percent year-over-year.
As the Financial Times has noted, "Amazon and behemoth Walmart have systematically stolen market share from the bricks-and-mortar incumbent."
At this point, Borders seems stuck between the bricks and a hard place. It is difficult to envision a scenario where it can recover the momentum to once again challenge Barnes & Noble, the leading books retailer. B&N is more aggressively competing in the emerging eBook marketplace than Borders, with its Nook eReader and other initiatives.
The Borders chain grew from one original bookstore in Ann Arbor, Michigan, founded by brothers Tom and Louis Borders in 1971. The former University of Michigan students invented a unique inventory system that essentially customized the books in each store to its particular community.
Their first bookstore, located just off campus on State Street, occupied a space previously rented by the man who would go on to become the punk rocker Iggy Pop.
The chain was acquired by Kmart in 1992, but after three difficult years it bought its freedom from the discount retailer, which had developed serious financial problems of its own.
By then, however, the brothers who lent their name to the chain were long gone to other pursuits. Louis Borders currently runs the startup MyWire, headquartered in Redwood Shores, CA.
image: Wikipedia Commons
Disclosure: From 2005-7, David Weir served as Editor-in-Chief for MyWire.
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