Bankruptcy may be a tragedy, but Borders had it coming.
Am I the only one catching a whiff of good old fashioned karma in the news Borders will close 30 percent of its stores? Sure, it’s a tragedy for towns and neighborhoods left without a bookstore, but I say the chain retailer earned its fate.
Barnes & Noble deserves to die, too, but let’s pray it doesn’t. We need bookstores, no matter how dirty their hands, more than we need justice.
Lynn Neary at NPR and Michael Rosenwald at the Washington Post both mention that the rise of Borders “helped crush scores of independent booksellers,” but this makes it sound like a natural, almost evolutionary, development, like an old business model being replaced by a new, more efficient one.
What actually happened is much worse. Borders, along with its equally predatory competitor Barnes & Noble, colluded with major publishers to drive independent stores out of business. They did this by using their size — by 1998 the two chains combined had over 2,000 stores — to force publishers to give them secret, illegal discounts.
We know about these sharp practices because the American Booksellers Association, the trade group for independent bookstores, filed two landmark law suits in the 1990s. In 1994 the ABA forced consent decrees from six major publishers, who admitted they cut special deals with the chain stores.
Independent stores couldn’t match the chain store discounts and more than 1,000 went out of business — ABA membership dropped from 5,100 in 1993 to 3,500 in 1998. The publishers paid the ABA a settlement of $25 million, plus $2 million for legal costs.
In 1998 the ABA sued Borders and Barnes & Noble, charging the chains with “saturating markets” and “soliciting, inducing and receiving secret, discriminatory, and illegal terms from publishers and distributors” in order to drive indie competitors out of business.
For you Objectivists and other free market triumphalists, this is the way unregulated capitalism actually works. Instead of competing fairly, generating profits by selling better products at better prices, companies like Borders and Barnes & Noble (and Starbucks and Wal-Mart and Amazon) cheat and collude and use size to demolish competition.
Who can doubt that Amazon and Wal-Mart, by pricing e-books and some bestsellers at below cost, mean to force bookstores and even publishers out of business? The first time I read about the Kindle, I recognized it as a brilliant device intended to eventually eliminate all of Amazon’s competition.
Let me repeat that: All of Amazon’s competition.
But in pursuing such strategies, Amazon is merely updating a page out of Borders’ play book. It may or may not work. Borders helped its enemies by astoundingly inept business practices — among them outsourcing its online sales to, amazingly, Amazon. It also outsourced its e-business.
Barnes & Noble, though suffering, is in a much better position to respond to the changing market. It developed its own online site, bn.com, and it built its own e-reader, the Nook, which, as anyone who’s been to Barnes & Noble lately knows, it is marketing aggressively.
Independent booksellers are cautiously optimistic, too. A statement at the ABA website says “the indie bookstore model is well positioned for the future.” In what may be a very smart move, independents have partnered with another Goliath, Google, to sell e-books, and they still offer what the chains never could: Knowledgeable, personalized service.
“[O]ur members’ customers are telling us that, now more than ever, they appreciate the care independent stores take in choosing the titles to stock, and that the curated selection in our stores can’t be found elsewhere…In addition, more and more consumers appreciate the fact that our members are locally owned and have long-standing and close ties to their communities.”
Still, bookstores are in trouble, not only here but around the world. Angus & Robertson, Australia’s biggest chain, just declared the equivalent of bankruptcy, according to the Guardian, while in the U.K. the venerable chain British Bookshops went brankrupt, with 51 of 73 stores likely to close. Waterstone’s, Britain’s biggest chain, isn’t in serious trouble, but it will close 20 stores this year.
True story: While waiting to have the oil changed in my car the other day, I sat with two other customers. We were all reading. I had a magazine made of dead trees. One of my companions, an older gentleman, had a Kindle. The other, a youngish middle-aged woman, had a Samsung Galaxy tablet device thingy.
A lot of people, including my former Sun-Sentinel colleague Jim Davis, argue that delivery system does not matter, only content. I believe this is disastrously wrongheaded. Can you imagine a world without bookstores? Neither can I. Such a cultural castrophe is too awful to contemplate.
If you don’t want to live in that more sterile world, then go to a bookstore this weekend — and buy a book! Preferably an independent store, but Barnes & Noble will do, too. And there are still more than 400 Borders stores open for business. If you don’t want to see them all go away, then support them, for Pete’s sake.
Oh, and courtesy of The Wall Street Journal, here’s a list of the Borders stores set to close. Broward loses the Plantation andFort Lauderdale stores. I don’t see any closings for Palm Beach or Miami-Dade counties.