Borders U.K. Files for Bankruptcy Protection

Borders U.K. has filed for “administration,” something comparable to the U.S. bankruptcy.

In a good article the U.K.’s Guardian did a fine job of listing the many things that worked against the 45-store British chain, including:

• Competition from retailers such as supermarkets which carry only the bestsellers but discount those. This effect has been greater because of the mega-bestsellers such as the Harry Potter and Twilight series. If everyone is reading a bestseller they picked up with their bangers and mash, they aren’t reading a backlist or midlist title they may have found at a Borders store.

• The reluctance of the British population to drive to a “retail park” to visit a Borders big box store and its cafe. The article quotes a retail analyst as saying: “Although we now have a coffee culture, the idea of driving four or five miles to browse, then sit in a Starbucks and read a book never sat well with the U.K. consumer.”

• The fact that the generation exemplified by the TV show “Friends” has become the first generation to buy online regularly. It’s thought that online book sales now count for 20% of the total market.

• The impact of e-book readers like Amazon’s Kindle and B & N’s Nook, an impact that has been small to date but is likely to become a sizeable in the next few years.

• The general malaise of the economy.  This appears to be as overblown in the U.K as it is here. The Guardian reports that book sales last year lost their upward growth for the first time, declining 1% last year and up to 2% this year. U.S. sales are experiencing approximately the same decline. I agree, with profit margins being what they are, losing 3% over two years is tough, but it shouldn’t a killer except for the weakest companies. But the real damage comes when booksellers—including publishers—over-attribute their struggles to the down economy taking the focus off more important challenges that can actually be dealt with. The book industry won’t single-handedly turn the world economy around—Obama is doing that— but they can be proactive when dealing with changing buying habits and product delivery methods.

Just a Write Thought.