Wednesday, November 26, 2008

The Other Shoe Drops







Now comes the rest of the story on the two big U.S. bookstore chains - and it looks like Borders Group continues to have much bigger problems than Barnes and Noble. According to the Bloomberg people:




Borders has fired 20 percent of its corporate workforce and reduced inventory while it seeks ways to win sales from Wal-Mart Stores Inc. and Amazon.com Inc.

The bookseller posted a third-quarter net loss of $175.4 million, or $2.90 a share, wider than the $161.1 million, or $2.74, deficit a year earlier, as consumers cut back on purchases of books and magazines.

Revenue for the three months through Nov. 1 fell to $693.4 million from $765.2 million, the Ann Arbor, Michigan-based company said. Sales at older stores dropped 12.8 percent, while debt was reduced by 34 percent to $525.4 million, Borders said.
I'm a bit surprised that Borders management is trying to steal sales from Wal-Mart and Amazon.com rather than from Barnes and Noble. I suppose that, in one sense, that's logical since it will be easier to focus on the differences between Borders and those companies; Barnes and Noble is simply too much like Borders in presentation and services for the two to really gain much of a competitive advantage on the other that way.

This is not good news for book lovers, that's for sure.

13 comments:

  1. Interesting blog, Sam.
    Here in Canada, the real big bookstore chain is called Chapters. [I practically live there... at the in-store Starbucks!].... anyhoo... the thing about it is that buying their books online is like always WAY cheaper than buying them in the store.
    It may be that this is the real trend of the future... shopping from home.
    But Wal-Mart?
    Yeah... who buys books from Wal-Mart?

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  2. I'm no lover of Wal-Mart, but they do carry a decent range of current titles. All best sellers of some sort, but many of them "literary" in nature.

    They're cheaper than Borders, too, which is why they are competition.

    I don't buy books from either store, for the record.

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  3. Borders and B&N too similar? Please, B&N is soooo much better. ;)

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  4. Wasn't Borders trying to buy B&N not too long ago? Or vice a versa?

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  5. Borders courted B&N for a buy-out a few months ago, but things are too far gone for Borders to be profitable any time soon. I bet they fold after the holidays.

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  6. Not much good news in retail these days, bookfool. :-(

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  7. Amy, looks like Black Friday was pretty successful this year considering the economy. Now I have to wonder if many people are done with their Christmas shopping for this year and just how bad December will be for the retailers.

    (You could not pay me enough to go shopping this weekend, though.)

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  8. Cip, for some reason, despite the convenience and better prices of online shopping, I still do the bulk of my book shopping locally...still seems to be the best way to discover something new and unexpected, I think.

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  9. C.B., Wal-Mart does seem to move books. What amazes me more, though, is to go into one of their Sam's Clubs and see books stacked up in bulk and being sold like canned goods. :-)

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  10. Sorry about that, Annie - don't be upset. :-)

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  11. Carrie, see Exile's comment.

    I can't imagine why B&N would go for the deal unless it's to get exposure into markets in which they don't already have a strong presence.

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