We’ve been hearing the rumors and rumblings for a while now, but Borders Group Inc., has officially filed for bankruptcy and will close 30% of its 642 stores (about 200 that seem to be underperforming), paying the price for its failed bid to compete with the likes of Amazon.com by pushing its brick-and-mortar business model.
Borders owes tens of millions of dollars to various publishers including Penguin Putnam and Simon & Schuster. That means a lot of writers and publishers are not going to get paid, who, in my humble and biased opinion, are the real victims here.
A major part of its downfall is that instead of keeping up with modern trends and embracing more of an online offering, the company instead decided to roll out more superstores that no one wanted, while Amazon and Apple cashed in on a growing consumer demand for electronic books. By the time the company started to embrace more of an e-commerce strategy, they were too late to the party.
It’s a shame because there are a lot of people who prefer to shop for books, music and such in a retail environment. I suppose if a local Borders store closes, there will likely be a Barnes & Noble nearby to fill the void (for now anyway). But it’s a good business lesson that Borders forgot or decided to ignore and apparently needs repeating: adapt or die.