Kobo Continues On, With or Without Borders
With the economy in the crapper and discount online retailers putting the financial squeeze on brick and mortar book sellers, it came as little surprise when Borders, long-time book retailer No. 2, finally filed for Chapter 11 bankruptcy. Borders isn’t totally dead and gone as a brand, but it seems unlikely that it will continue to exist in the shape and form we’ve known for so many years.
Part of the plan is to shutter as many as 250 of their existing stores that are simply too expensive to operate. They’re mostly in areas already hard hit by the recession, representing around 30% of their total retail space. This will bring them down to nearly a quarter of the 1,329 brick and mortar stores that they operated at the height of the commercial real estate boom in 2005.
I have heard from many who know me as something of an ereader evangelist claim that it’s the rising tide of ebooks that took down their favorite local book retailer and coffee shop, but the numbers don’t really seem to back it up. In their bankruptcy petition, Borders list more than $1.29 billion in liabilities – they were in a staggering amount of debt. eBooks to date represent less than 5% of the total book retail market, and looking at the numbers, conflating the disastrous management and the slowly shifting market for books would be incredibly disingenuous.
According to reports, the leaner, meaner post-bankruptcy Borders will put more of a focus on its customer rewards program, eBooks business, and non-book products. To me, that speaks to the fact that management still hasn’t learned its lesson. I always thought it was precisely this focus on toys, novelty calendars and low-quality crap that got them into this mess in the first place.
Fortunately for Kobo owners, my prognostication that having a Kobo put you on the wrong side of ereader history was not correct. According to the Q&A the company recently posted, the fallout at Borders has next to no effect on their operation, since Borders was only ever the mainstream icing on the Kobo-powered cake. So not only is your ebook library safe, but you will still be able to purchase ebooks from Borders.com, get technical support, and use Borders apps as though nothing else had changed.
It seems the one truly wise management decision that Borders has made in the last several years was not trusting any of their ebook operation to themselves.