On Wednesday, Borders – the venerable book retailer of four decades – filed for bankruptcy protection, a reality that leaves a gaping hole in the already-floundering world of print books and publications.
“It has become increasingly clear that in light of the environment of curtailed customer spending, our ongoing discussions with publishers and other vendor related parties, and the company’s lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor and which are essential for it to move forward with its business strategy to reposition itself successfully for the long term,” said Mike Edwards, Borders Group President.
With regard to the Chapter 11 Bankruptcy Code filing, Edwards added: “This decisive action will give Borders the opportunity to achieve a proper infusion of capital in order to have the opportunity to have the time to reorganize in order to reposition itself to be a successful business for the long term.”
Amidst the fallout surrounding Border’s major announcement, the finger of blame is being pointed in no shortage of directions. In addition to potentially legitimate criticism being directed toward the “strategic missteps” of company executives, many industry analysts are correctly citing digital content publishing – and, specifically, e-books – as a major culprit of Borders’ downfall. But as the New York Times reports, the blame ultimately returns to Borders’ executives in light of their “failure to understand the digital revolution.”
“The book retailing industry is very challenging right now,” Michael Souers, an analyst for Standard & Poor’s, tells the Times. “We’ve had significant transformation. Bookstores have gradually been losing their prominence, and the U.S. market is oversaturated in terms of the number of retail stores. So that trend will likely continue as e-books gain more prevalence in the market.”
As Borders begins the process of reorganizing, it’s apparent that a greater emphasis on all things digital must factor into the company’s core platform and future product emphasis. Unlike competitor Barnes & Noble, which successfully launched a branded e-reader dubbed the Nook, Borders came up short in its own e-reader efforts and never gained a foothold against the market’s juggernaut e-readers, which also include Amazon’s Kindle and Apple’s iPad.
To read the official announcement from Borders regarding the company’s bankruptcy protection filing, click here.