Used Books Blog

Borders Books is a company undergoing tremendous changes as it works to turn around its business in a flagging industry. Yet, based on some comments to a previous post, it seems like they’ve pissed off one of their most important assets - people. Here are a few excerpts:

From the front lines, those “strategic alternatives” included getting rid of managers and supervisors, eliminating the employee gift card of $25/mo. for full time employees, eliminating time and a half for all employees working holidays and the thing that is guaranteed to save their rosy butts — charging employees 35 cents for tea and coffee that had been previously free.

We have also been vigorously sending back music and book product to the vendors in order to get quick credit back at the expense of our empty bookshelves and music/DVD units …

… managers have been asked to cut back on supply ordering, and necessary repairs are not being completed.

My brother works for Borders and he said that they have just cut out the employee of the month program (probably because there was a $25 gift card given to the recipient).

Borders fires there dave Carpenter winner for 2005 because he cares about the customers. now they want to go to St Charles Ave. with no one that knows the city of New orleans. Is getting rid of your long standing employees a good idea?

I didn’t expect Borders employees to find my little corner of the Internet. I’m pleased though! They’ve found a place to vent and it’s extremely interesting to get their perspective on the changes taking place.

Some of the gripes above revolve around entitlements, perks that are now being taken away. I know some may say these folks are just whining but, if true, these moves are very short-sighted in my opinion. Books are not unique, they are essentially commodity products. Price is clearly a big part of the equation but the experience can also have a large impact on sales.

I doubt customers are getting the best service if these comments are a true indication of the current climate in Borders stores. And Borders needs every advantage they can get with Barnes and Noble, a host of online venues, and big box retailers like Target and Wal-Mart ratcheting up the competition.

So I again must ask whether Borders is really interested in turning around their business for the long haul or are they just looking to make the short-term financials look appealing enough to Barnes and Noble?

No, I’m not talking about The Paper Chase, the novel, movie and TV series featuring John Houseman. Instead, I’m referring to the UK stationary retailer that Borders purchased in 2004. Yes, according to Todd Sullivan of Seeking Alpha, Borders has hired Goldman Sachs “to conduct a review that ought to lead to a sale.”

Indeed, if you eyeball a May 27, 2008 Borders press release you’ll note the following under the International heading:

Management indicated that the strategic alternatives process for its Australia/New Zealand/Singapore and Paperchase businesses is ongoing.

Can I say again how much I dislike the euphemism “strategic alternatives process”. Putting aside this pet peeve, Borders has already sold the Australia business, so they’re not just talking but actually following through on these “strategic alternatives”.

This is yet another move by Borders to focus on the core business and the domestic (US) market. It makes sense whether they’re in it for the long run or simply making themselves pretty for a Barnes & Noble purchase.

As one Borders employee commented, “Paperchase is also losing money, and is a big waste of space.”

As recently reported, Borders book stores may be for sale after securing $42.5 million in financing to continue operations. However, the terms of the financing (12.5%!) may make it unappealing to prospective suitors. I’m not saying I could get $42.5 million, but 12.5% interest seems excessive in this setting, even amid the credit crisis.

So what’s going on at Borders and what does this really mean? As someone who lived and breathed this industry for three years I think this is, in some ways, a positive sign. However, it might be too little, too late. So how did we get here?

Borders had an astounding lack of vision, strategy and execution. They rested on their laurels and didn’t see the train rumbling down the track at high speed, high beams on and whistle shrieking.

I remember walking into Borders for the first time (longer ago than I’d like to admit) and being overwhelmed. It was big and it had books and music. That’s right, there was a time when Borders was a cut above Barnes and Noble, when you sought out the Borders location nearest you. It was cool and cutting edge. You wanted to buy books there.

Not so today.

Barnes and Noble responded with bigger stores, added music and partnered with powerhouse Starbucks for their cafe implementation. They made their stores inviting and implemented programs (author readings, expanded children’s sections) that would encourage people to stay longer. Their strategy is simple. The longer you’re in the store, the better chance you’re buying something. Trust me, as a new parent, the children’s section and train table in particular is a massive draw. And yes, I spend plenty on impulse purchases.

Barnes and Noble evolved and surpassed Borders in the offline market. At the same time, mass market retailers like Target, Wal-Mart and Costco began selling books and ate into the traditional bookstore market. And then there was this little thing called the Internet and the rise of Amazon.

Barnes and Noble may have been slow to fully realize their position on the web, but they understood the need to be a stand-alone entity. Borders on the other hand decided to ‘partner’ with Amazon. I don’t know the details of the arrangement but Amazon made out like a bandit and Borders was slow to realize they were getting massacred online. Amazon essentially swallowed the Borders brand online. (In some ways it would make more sense to put an Amazon.com logo on all the Borders stores.)

Our business development team at Alibris was often flummoxed by the lack of clarity at Borders and the glacial speed of their decision making process. Visits to the Ann Arbor offices were gloomy and depressing because of the inertia and vise-like grip on status quo displayed. Yet, there were signs of life, of rebirth. New blood with new ideas fighting to turn the company around.

The decision to sever their relationship with Amazon and build their own ecommerce destination was a turning point and the right move - just 8+ years late. They’re also launching a new concept store in the hopes of, once again, leap-frogging Barnes and Noble.

The financing comes from a hedge fund who also happens to be the largest stakeholder in Borders. Off the cuff, it seems a backhanded vote of confidence in the new direction. At a minimum they want to see the impact of a new website and the new concept stores. They want to see if Borders can catch up, though admittedly in the stiff headwind of a rocky industry and economic climate.

Last call! It’s time for Borders to put up, or be shut down.

I collect Advance Reading Copies, better known as ARCs. ARCs are uncorrected proofs or galleys printed prior to the publication of a book for promotional purposes. You may also hear them referred to as an Advance Copy, Advance Readers Copy, Advance Review Copy or Advance Reader’s Edition. Either way, I find them intriguing and seek them out whenever I buy.

Advance Reader’s Editions are great because they’re scarce (print runs are very small) and you can often get the book well before it’s actually available to the general public. Better yet, they’re in soft cover format instead of a bulky heavy hard cover book. To top it all off, they’re generally cheaper than a First Edition.

An Advance Readers Copy usually has a letter from the editor in the preface and includes marketing and publicity information on the back cover. The cover art on an ARC may be completely different and sometimes there are real differences in the content, though that seems more the exception than the rule in my experience. There are frequently typographic errors in the text, though I don’t find that it detracts from my reading of the book. In fact, it’s a sort of sleuthing that I enjoy. It enhances the feeling of privilege - that you’re getting a sneak peek at the author’s work.

Collecting ARCs isn’t really mainstream, but it is acknowledged by bibliophiles and I highly recommend reading the esteemed Ken Lopez’s take on the topic. There’s also a bit of controversy about the subject from a publisher perspective, exacerbated by the used books market on the Internet. Every Advance Reading Copy is labeled as ‘Not For Sale’ on the cover, plain as day. Never mind that pesky ‘possession is nine tenths of the law’ axiom.

Scribner went so far as to put a letter on the cover of Stephen King’s Lisey’s Story that essentially pleads and browbeats recipients into not reselling the book. In this letter EVP Susan Moldow cites previous experiences in which Advanced Reader’s Editions showed up on eBay shortly after being distributed. I find it a bit shocking that a publisher is worried about such a small rounding error.

Instead, I’d like to think Scribner isn’t that shortsighted, that perhaps this was a bold, sly move to encourage people to sell copies on eBay and increase the buzz on the book. I mean really, what better way to get folks to sell these on eBay than to actively campaign against it right on the cover. Talk about a collector’s item! Fine Books & Collectibles has a nice article on the subject, including a stance on the unenforceability of the ‘Not For Sale’ language.

Unfortunately, publishers are concerned about the resale of Advance Reader’s Editions. A few times a year Alibris would get threatening letters from publishers or their lawyers demanding that we remove certain ARCs from the site. With that in mind I actually held off on my review of Zeroville until it was published. I’d purchased it as an ARC well before the release date, another great addition to my collection which includes (among others) Fluke by Christopher Moore, Fortress of Solitude by Jonathan Lethem, Jennifer Government by Max Barry, Bad Monkeys by Matt Ruff and Th1rte3n by Richard K. Morgan.

Thing is I gave Zeroville a great review which might have helped the hype and sales. In my mind, Advance Reading Copies are to books what private Beta sites are to the Internet. What do you think? Are you a reader who likes the idea of an ARC? If you’re an author, what’s your take? Any publishers nosing around the blog, jump into the fray! Booksellers, have you gotten those nasty-grams from publishers? If so, what did you do?