It's no secret that Borders was hemorrhaging money long before it sought chapter bankruptcy protection five months ago. Because of the company's shaky finances, most publishers began transitioning sales to other outlets long before the bankruptcy filing. Even so, the crippled chain moved a lot of books; it was the nation's #3 bookseller, with 14% of the market last year, according to Bowker. Since Borders had close to 400 stores, 6.8 million sq. ft. of selling space, and $431 million worth of inventory, many in the industry are wondering what entity could pick up the sales that will no longer be coming from the chain.
"Borders was an important customer of ours to be sure. But we've been preparing for this possibility for some time now. And we had restructured our operations to reflect a post-Borders environment," said Dominique Raccah, publisher and CEO of Sourcebooks. What she finds more troubling than the loss of hundreds of retail outlets is the nearly 11,000 booksellers who will soon be out of work. "I'm heartbroken that we're losing so many [people]. It's why I started the #ThankUBorders hashtag. To lose a force like that will have some impact on our publishing strategy and on some of the opportunities we have to break out a new title or author."
Long before Borders's current woes, publishers began pushing deeper into nontraditional markets to bulk up sales and, more recently, to make up for a drop in print. According to Nielsen BookScan data, print sales dropped 10.2% for the first half of 2010. "In the past six months, 12 months, 18 months, we couldn't depend on Borders bringing in the revenues that they would have four years ago," said Gary Gentel, president of Houghton Mifflin Harcourt. "We've had to go wider and shallower. We've worked very, very hard to make sure we've got good relationships with ancillary markets, and that has paid off nicely."
"In communities where there are other bookstores, we can help ensure through inventory management, in-store merchandising, and direct-to-consumer marketing that the strongest title categories from the former Borders stores remain well supported," said Madeline McIntosh, president of sales, operations, and digital at Random House. However, like Gentel, she anticipates working with mass merchandisers, groceries, and other nontraditional booksellers in areas without bookstores to reach former Borders customers.
Looking ahead, Norton chairman and president Drake McFeely is unsure where lost sales will go. Noting that the chain had "astonishing success" with Norton's paperbacks, McFeely said, "I am encouraged to see ABA members saying they see opportunity here, but clearly Barnes & Noble, Amazon, and the other national accounts now become even more important to the publishing process."
Inevitably, some Borders customers will shop online or read digital books. Still, Alison Lazarus, president of trade sales at Macmillan, is "confident that the majority of Borders customers will find their way to other book outlets." Tom Hallock, Beacon Press associate publisher, agrees. "I do think the Borders customer seems to like a physical space, and I expect they will be looking for a new place to browse, drink coffee, and hang out," he said. But even if customers do go digital, it won't affect Beacon's publishing program: "We had expected to sell less print in physical bookstores next year. This just accelerates the trend."
How readers will discover books, particularly in areas once served almost exclusively by Borders is a more widespread concern. "Where a community has lost its bookshop, it is inevitable that sales will be lost as the browsing and gift element of book buying is much more difficult to do online," said Hachette Book Group CEO David Young. "Also, with certain genres, Borders outperformed the market, and it's unlikely that all of these sales will transfer to other outlets."
"It's impossible to say specifically which retailers will be the beneficiaries," said Michael Selleck, executive v-p of sales and marketing at Simon & Schuster. "We are watching the marketplace closely for shifts in sales patterns and hope that readers who used to frequent [Borders] locations have not stopped reading and wanting to own books." Like many publishers, he anticipates greater growth in online sales of print books and digital titles.
One publisher, opining anonymously, said e-books "is what's saving all of us." The last time publishers saw anything like this, when in the 1990s Encore Books, Crown, and Lauriat's closed, there was not the cushion of a format that doesn't depend on physical stores. Still, as Susan Katz, president and publisher of HarperCollins Children's Books, remarked, it doesn't make this any less painful: "We're very sad to see the closing of Borders. There will certainly be a void without them." Then she added: "But we look forward to continuing to work with the many enthusiastic booksellers across the country to bring new and established authors to readers everywhere."