Booksellers Without Borders?

Borders?

The big publishing industry news over the past couple of days entailed US book chain Borders filing for bankruptcy as well as the REDGroup entering its Australian book chains of Borders and Angus & Robertson into voluntary administation (along with the New Zealand newsagent Whitcoulls). Fancy Goods, the Bookseller and Publisher Blog, has provided a comprehensive round-up of recent media coverage of the local angle. The Book Show on ABC Radio National also has a lengthy story for streaming/downloading which discussed both issues and their impact for bookselling here and in the USA.

It remains to be seen what happens to these huge book chains and whether anything can be salvaged from their barely-gasping remains. Already, Australian gift card holders are being told that they are required to spend double the total value of the certificates, in effect matching one dollar for every dollar of credit on the voucher. Either buy up big or run the risk of losing the value of your gift card should the administrators shut down the stores for good. There were quite a few disgruntled customers wandering the aisles of our local Borders this afternoon.

“Well, I suppose I can just buy a whole bunch of Lonely Planets,” one girl grumbled to her boyfriend. “It’s still like getting them for half-price.”

We were there to purchase a novel a friend of ours has just had published and because, as part of the Borders VIP program, we would be getting 30% off the price as long as we purchased at least two books. Borders has been fairly generous with its discounts actually, and I have to admit that I only time I ever really buy from them now is when I have a coupon firmly in hand to offset their inflated RRP.

The novel we wanted was happily on the shelf, albeit priced at $22.99 instead of the $19.95 RRP, and I began browsing for a second book to qualify for the discount. Actually, it was a hard-target search using the Borders instore database. An inquiry for Kraken by China Mieville (his most recent novel) advised me to “check Borders online”. The first and second volumes of The Hunger Games were likewise not in stock, despite the fact that they had an end-aisle display of the third book along with a few HG bookmarks, t-shirts and journals proclaiming the series to be a “Borders Bestseller”. (The computer did indicate the store had three copies of a slipcase set of all three books but floor staff sadly informed me that this was incorrect and they hadn’t had copies for weeks.) Tansy Rayner Roberts new novel? Nope. Rowena Cory Daniells new fantasy series? Nope. How about The Greatest Show on Earth by Richard Dawkins, a recent bestseller? Alas, no luck there either.

Disheartened, I tried to think of another recent-ish title I’d been planning to procure and hit upon The Children’s Book by AS Byatt. Success! There was a trade paperback on the shelf. It was a bit battered, though, with bumped edges and a crease down the middle of the front cover. The price sticker on the back said $38.99. I hummed and hahed, debating whether or not to leave it go in lieu of finding a clean copy elsewhere, then flicked to the front page and was confronted with this:

borders book

Now I know it’s not the greatest photo — snapped surreptitiously on my husband’s mobile — but doesn’t that look like the pencilled marks of a secondhand bookseller? The condition of the book itself was certainly more in keeping with finding it on the shelves of such a vendor — along with the $12 pricetag. Have some Borders stores become so desperate they are sourcing secondhand stock and selling it at “new” prices? I can’t speculate beyond the existence of this one book but it was a very odd, almost unseemly thing to come across. Needless to say, it went back onto the shelf.

As did the original novel we had travelled to Borders to purchase — simply because we were unable to find another book we wanted in order to take advantage of the VIP discount and were not prepared to pay over RRP on the one book we did want. Depleting your stock and raising your prices is not the way to attract and keep happy customers, yet this has been the way Borders has been operating for the past few years. It’s a shame. I truly loved my local store when it opened. They stocked a huge and diverse range of books, including backlist novels and hard-to-find non-fiction titles, and I enjoyed browsing and buying from their shelves.

Today, however, was a perfect example of what has been my typical Borders shopping experience over the past three or four years. (Except for the strange, possibly secondhand book, that is. That was disturbingly new.) If a strongly motivated customer cannot walk into their local bricks-and-mortar bookshop and find a popular, fairly recent title on the shelves — let alone good customer service — then it is little wonder we’re all migrating to online stores.  I could go on a little in this vein, but John Birmingham has written a concise column along similar lines. So go read what he has to say.

Sadly, it comes as little surprise to see News Limited, one of the big players behind the recent attempt to lift parallel import restrictions on books in Australia, weighing in with a snarky I told you so. A pity that the column is, in its own words, “largely bunkum”.

I’m not going to rehash the parallel import debate here, but I would remind Uncle Rupert & Co that Australia is not alone in its territorial protectionism. The two biggest English language markets in the world — North America and the UK — are absolutely closed markets. Now, if there was a proposal to abolish all import restrictions worldwide and Australia was the only hold-out, then we’d have to sit down and talk. But why should we be expected to abandon any protection of our local publishing industry when the two most dominant markets insist on aggressively protecting theirs?

There are a lot of issues with territoriality and copyright, and the situation is becoming increasingly complicated with the advent of e-books and the blurring of retail borders via direct online sales, but to put the collapse of Borders/A&R squarely in the lap of the anti-parallel import lobby is simply ludicrous.  (We can only hope this does not lead to a renewal of calls for Australia to become a literary dumping ground.) There are a lot of factors which contributed to the downfall of these book chains, but it seems that poor management and questionable business/financial models should be seen as ranking pretty damn high on that list. As Glenn Dyer writing in Crikey notes:

… in many respects, REDgroup has been a collapse waiting to happen. That it came a day after the unconnected Borders group in the US failed, was probably co-incidental. The US collapse didn’t cause the local business to fail, but there was a familiar theme: too much debt, a botched Internet and expansion strategy and four CEOs in four years. In other words, poor management, just as there was at REDgroup and Pacific Equity.

Since last July, REDgroup has cut out all the DVD and CD sections in the Borders stores in Australia and written down stock by $30 million, which in turn produced a loss of $43 million for the year to August 2010 as sales fell 10% to around $500 million.

But the key is the reported debt figure of $175 million, which would’ve been costing the group $17 million or more a year. That debt would have been growing as a proportion of sales. But with sales falling, cashflow every month was falling to the point where there was little available to pay that debt because suppliers and staff had to be paid, as did the taxman and landlords like Westfield.

But don’t tell the private equity mobs and their mates in the advice and media sectors that that’s the reality for any business bought by PE. High debt means death if you are in a business that is trying to survive in the current economic conditions.

Possibly, instead of pointing fingers at online sales, a healthy Australian dollar or eBooks — all of which Borders was actually in a position to take advantage of through their own website, cheaper imports of foreign editions of titles not published in Australia, and the Kobo eReader — REDgroup should take a moment to contemplate their own shortcomings.

I sincerely hope that a significant number of the Borders/A&R stores manage to continue trading in some restructured form — although it will be hard to win back the trust of customers and creditors alike — and that the staff all find continued employment somewhere in the retail and/or publishing industry. I’m certainly not joining the parade of Chicken Littles just yet. Because I don’t think the collapse of a badly-managed company — however large — spells the end of publishing and/or bookselling in Australia. Certainly, we live in interesting times. But there are opportunities out there for creatives and the business-minded alike, and I really do think the future is a bright and exciting one.

12 Comments

  1. You’re in danger of becoming the go-to person for intelligent comment.

    • Damn. Next post will be replete with scatological humour and unfunny puns.

  2. that’s one fine and shocking photo there.

  3. Wow, Kristyn. You were like a book detective, finding secondhand books being sold as new in Borders!

  4. Richard Flanagan of the Age writes:

    Publishers needed that critical mass to push many books that otherwise might have been dubious commercially over the red line into a small profit. It meant a first novel, a history, a book of essays might just be able to sell 3000 copies. But with Borders and Angus & Robertson in voluntary administration, with the independents struggling and more and more closing, those days are perhaps gone. Many small publishers we have come to see as vital – Text, Black Inc, MUP to name a few – must be looking today at their future publishing schedules with very heavy hearts, wondering how on earth they can continue to make it all work.

    But my experience of a number of bookshops in Adelaide has been the same as yours. Failed to find lots of Spec Fic writers managed to find Tender Morsels (overpriced) and a trade paperback of yours (again overpriced). But there were shelves of Vampire fiction and celebrity books. I think I’d have to see some evidence before I start believing that A&R/Borders were champions of Australian authors.

    • As far as Borders and A&R went, I certainly didn’t notice my local stores doing a very good job of carrying and/or promoting books by small to medium sized presses. By contrast, independent and boutique/specialty bookstores seem to do wonders in this regard. Small and medium sized publishers are also better placed, for the most part, to take advantage of the changing landscape when it comes to promotion and distribution (i.e. online outlets, social media, etc) by virtue of their size and flexibility. Text and Black Inc especially are doing a remarkable job in these areas.

  5. Could it be that the second hand book was switched for a new one by a customer?

    Great summary. I’ve been cringing at all the people with their champion causes of ebooks and PIR using this as an opportunity to preach. People in the book selling and publishing industry have been shaking their heads at Red Group and predicting its demise for over a year. Mr Harvey Norman telling us we can buy things cheaper online can’t have helped, either🙂

    • Yeah, someone suggested to me today that the secondhand looking book was maybe “returned” or “swapped” by an unscrupulous customer. It was in pretty shoddy condition, though, and the price sticker on the back looked untampered with. I don’t know … one of those little mysteries, I guess.

      • If it was in shoddy condition, I’d say it was more likely a sneaky swap. There’s be no point in swapping a near new second hand copy for what was going to be a near new second hand copy as soon as you took it outside the store. And it’s not hard to remove a price sticker and pop it on another book.

        There have been some interesting scams in recent years involving people stealing books and then selling them online as new stock.

  6. Oh, the News Ltd thing, saw it on the news last night, SO ANNOYING!

    Thanks for expressing yourself a little more eloquently than SO ANNOYING!

    Honestly, I’m sad to see Borders go. The Kotara Borders in Newcastle always had an excellent range of spec fic, a shelf set aside for Australian spec fic authors, staff who could understand questions like, ” do you have this year’s Hugo novel shortlist please,” and a cafe that was most excellent for drinking hot chocolate and making a sneaky list of which books to later order in from the local indie (sorry for being a leech, Borders. In my defence, I did buy all my DVDs from you).

    Sorry to hear that yours sucked.

    I’m kind of please about at A&Rs going, though, they had pretty much turned into bargain basement sales over the last few years, maybe now the real bookshops will pick up some business.

    • With a bit of luck (and better management) the more successful stores may continue to trade in a restructured form. It really depends on how badly REDgroup ran Borders into the ground (A&R seems long lost as a chain, unfortunately). Borders has the benefits of a robust online presence and having been ahead of the curve here in Australia with eBooks. Those parts of its business did a lot to prop up the flailing stores. It might still be salvaged and sold as a going concern, which would certainly be to the benefit of customers and creditors alike. Only time — and auditors — will tell.

  7. […] considered and substantiated post on any particular subject. (Because I haven’t done that before.) It’s fear, plain and embarrassingly simple. And it’s really difficult for me to […]


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