Borders Confident Regrouping Will Help Bottom Line
STEVE INSKEEP, host:
The future of the book seller Borders is uncertain. Borders filed for bankruptcy protection yesterday and some 200 of its stores will be closing soon. Borders says it will emerge from bankruptcy in a better position, but as NPR's Lynn Neary reports, that is not a sure thing.
LYNN NEARY: Borders got its start in Ann Arbor, Michigan, and a lot of people there think of it as their own. So while the news of Borders' bankruptcy was not a surprise, it did make shoppers like Jack Love feel a little nostalgic for the days when book stores were plentiful.
Mr. JACK LOVE: We need physical places in the universe for people to look at books, but, you know, this is the economic reality we're living in.
NEARY: But even Love has to acknowledge he doesn't really shop at bookstores as much as he used to.
Mr. LOVE: Well, I guess I'm part of the problem, because I'm a book fiend and my attendance at Borders has declined dramatically in recent years.
NEARY: And that is exactly the problem. In recent years, customers have fled book stores in droves, preferring the convenience of online shopping and e-books.
Mr. MIKE SHATZKIN (CEO, Idea Logical Company): This did not come out of the blue.
NEARY: Mike Shatzkin, CEO of the Idea Logical Company is a consultant to publishers. He sees the Borders re-organization as a necessary correction. He says there are too many book stores and too much shelf space and not enough sales to support them. Shatzkin says Borders' management hasn't met the challenges of a changing business.
Mr. SHATZKIN: Because Borders has not been well run for a long time, they've taken a disproportionate share of the hit of reduced sales, and they're the most fragile and the most vulnerable now.
NEARY: The company now has more than a billion dollars in debts. It owes millions to major publishing houses. It plans to close down 30 percent of its stores, but James McQuivey of Forrester Research says that might not save them.
Mr. JAMES MCQUIVEY (Forrester Research): When you look at the prospects for the overall book selling business, it's not like you just need a new crack management team to turn things around. The whole fundamental structure is changing.
NEARY: Borders says it intends to continue business as usual at its stores that remain open.
Lynn Neary, NPR News, Washington.
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