Borders Books Fights For Survival
RENEE MONTAGNE, host:
Barnes and Noble announced, this morning, that it had its strongest holiday sales in a decade - with BarnesandNoble.com up nearly 80 percent compared to last year's holiday season, and its stores were up nearly 10 percent. That dramatic increase was spurred by sales of its popular e-reader, the Nook. And that good news comes as its competitor, Borders, is fighting even to keep its stores open.
NPR's Lynn Neary reports.
LYNN NEARY: Larry Kirshbaum has been watching the growth of superstores since his student days in Ann Arbor, Michigan, the hometown of Borders.
Mr. LARRY KIRSHBAUM: The superstore really changed the whole character of the book business.
NEARY: Kirshbaum should know. He went on to become the head of the Time Warner book group and now has his own literary agency. Kirshbaum says stores like Borders and Barnes and Noble greatly expanded the market for publishers, because they carry so many titles and are located in so many parts of the country.
Mr. KIRSHBAUM: They're so integrally connected to the growth of the business over the past 30, 40 years, that any diminution of their size and scope is going to be painful for the industry.
NEARY: So when Borders announced that it was delaying payments to some of its vendors while it sought refinancing, the book world reeled. Everyone knew Borders was in financial trouble, but the company's statement painted a grim picture of the situation. Borders spokeswoman Mary Davis reads an excerpt from the statement.
Ms. MARY DAVIS (Spokeswoman, Borders Books): Borders stated that there can be no assurance that it will be successful in refinancing its senior credit facilities, or restructuring its vendor financing arrangements.
NEARY: The statement went on to say that it's possible the company could experience a liquidity shortfall. It didn't mention the word bankruptcy, but bankruptcy or worse was on everyone's mind.
No one, says Fordham University marketing Professor Al Greco, wants to see the end of Borders.
Professor AL GRECO (Marketing, Fordham University): This would be a horrendous event for authors and agents who would lose money, for consumers and for the book publishers - not a happy situation for anybody.
NEARY: Among those who would be upset if Borders did not survive is 25-year-old Megan Isaacson, who would hate to lose her Borders store in Meridian, Idaho.
Ms. MEGAN ISAACSON: I would be super disappointed.
(Soundbite of laughter)
Ms. ISAACSON: And then I'd probably have to go find somewhere else. I'd, you know, have to go to, like, Barnes and Noble, which I find is too big.
(Soundbite of laughter)
Ms. ISAACSON: Or I'd have to search out some independent ones. Or go on line.
NEARY: Consumers buying books from online retailers like Amazon is one of the factors that led to Borders' troubles. The retailer has also suffered from frequent changes in management. And unlike Barnes and Noble, which came out with its popular e-reader the Nook, Borders was ill-prepared to compete in the digital book market.
But Michael Norris, a publishing analyst with Simba Information, says even a competitor like Barnes and Noble could be hurt if Borders went under.
Mr. MICHAEL NORRIS (Senior Trade Book Analyst, Simba Information): I don't think that anyone at Barnes and Noble's headquarters is going to be celebrating if Borders goes out of business, because I just don't think that would benefit them at all. And I think that they would benefit, as would all consumers, by having a healthy number of bookstores that are committed to the future of the product in the competition for business.
NEARY: Borders is meeting this week with publishers in an effort to work out new payment terms. And publishers have their own bills to pay, says Al Greco. But in this situation, they may have no choice.
Prof. GRECO: The publishers may have to go along and help Borders out, in order to not create a catastrophic situation in the book business.
NEARY: Barnes and Noble has issued its own statement about Borders meetings with publishers: It says the playing field should be even, and publishers should give the same terms to all booksellers.
Lynn Neary, NPR News, Washington.
INSKEEP: Barnes and Noble's e-reader is selling well, along with Amazon's Kindle and the Sony Reader. Other readers have not succeeded at all. Apple's wildly popular iPad prevented a number of e-readers from even reaching the market last year.
RENEE MONTAGNE, host:
So we say goodbye this morning to the Plastic Logic Que. It was promoted as a business-oriented device with a big screen, the size of a full sheet of paper. Its spring release never happened.
INSKEEP: Bookeen Orizon was a six-inch device that claimed to have a smooth touch and no glare problems. Not really sure if that's true, because it never hit stores in 2010.
MONTAGNE: Then there was the Skiff, with a big touch-screen display that was supposed to appeal to newspaper and magazine readers. But that didn't float.
INSKEEP: None of these disappointments will prevent more companies from diving into the e-reader business in 2011. A Chinese company is unveiling an e-reader with color e-ink, promoting a full-color display without the glare from a screen.
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INSKEEP: It's MORNING EDITION, from NPR News.
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