Buy buy . . . sorry, bye bye, Borders, we’re sad to see you go

We were sorry to hear that Borders was closing up 1/3 or more of its stores.  Although, the upside seems to be that 2/3rds are staying in business. We lost our Borders in January when the holder of the lease decided to lease out to someone else because Borders had not negotiated a new one.

We were told that the Borders in that location was successful and that they wanted to stay, but that seems doubtful now. The “failure to negotiate” the new lease happened way back prior to June 2010, so the indication that all was not well for the Borders franchise was there.

From what’s been reported, the company’s long-time staffers left by Jan 2010, it paid off its last major loan in March and was back on an even footing in April 2010. Then it was taken over in May by a holding company and from there it was all downhill.

It seems like a fairly standard scenario in the US business world. No one really wants to make a business pay. That’s too much work.  Way easier to buy a business on a even keel and rather than make it work, strip it of assets, load it with other companies’ debt, and then bankrupt it.

A Simba Information analyst pointed out that Borders failed to respond when the industry evolved and books and other media became available online and elsewhere. And while that may be partially true, Borders reported significant losses for the third quarter of 2010, compared to 2009. Which sort of implies, Borders was bought and then immediately allowed to fail because that was felt to be in the best interest of the new owners.

It’s really sad.  Worse, some of the employees of our local store were told in Jan they’d be going to other stores, but now those stores are slated to be closed.

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Published in: on February 23, 2011 at 8:00 AM  Leave a Comment  
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