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Everyone knew it was going to happen. Today Borders finally gave in and filed Chapter 11. This is reorganization so it isn’t the end… yet. But it is a sign that they are in serious trouble. They have announced 200 of their 600 stores will close.


I am not going to write about all the things Borders did wrong. I did that a few weeks ago. But that is easy. Plus does it matter? I have been reading a lot of articles that basically state the same thing — Borders missed the internet; Borders missed eBooks; Borders had bad leases…


But Borders did a lot of great things in their day.


1) Trade paperback tables – sure every bookstore has tables. But Borders was able to take the strength of their national locations and put math titles, science titles, fiction from small presses etc on the tables and sell them. There were instances of Borders representing 75% of a trade paperback overall sale. Borders would take backlist and promote it. They put interesting books (and not Danielle Steel) on the tables. It worked and gave exposure to many titles that never would have broken out beyond a university market.


2) Inventory – at one time, Borders was the place for the best selection. Then the internet came along and selection was no longer an asset but a liability. The nature of selection means that the inventory turn was low — possibly 2 a year. This is not acceptable for most type of retailers. But Borders made it work. They supported all of an author’s books. They carried a vast list. Plus (in the beginning) they were able to control inventory better than anyone.


3) Competition to Barnes & Noble – I am a fan of B&N. But I believe competition creates growth. The race to open new stores spurred a golden age in bookselling. I believe B&N would not have been as strong if not for Borders pushing them. Borders also provided a balance to B&N. It gave publishers two major growth vehicles. If B&N didn’t want to support a book but Borders would do so – the book still had a chance. Coke needs Pepsi. B&N needed Borders.


4) Visits to Michigan – OK the annual January “Rep-o-Rama” was tough. But it was fun. It brought all publishers together in one room for two days. Not sure what official business was accomplished, but there were lots of informal talks and things got done. Today, publishers don’t get this 1:1 interaction and face to face talks. The spontaneous creativity that comes from small-talk is gone. There were many creative ideas that were discussed and implemented. Also, Ann Arbor is a nice place to visit – just not in January.


5) Buyers that cared about the books and were real ‘book people’ – The staff was top notch. The buyers smart and loved books. It was wonderful to talk books with them. Sure it changed over time as different corporate-led initiatives chipped away at the buyer’s expertise. I think the attempts to standardize the process took away from the uniqueness and killed the attitude of the selection.


The book-selling world has changed dramatically. In 2011, the Borders model of 100,000 books and a friendly reading atmosphere is no longer viable.

But in 1999, it was a great model.


I am sad to see Borders die. They were a great bookseller. They had a good run. They didn’t adapt.


This is just a short list. Borders did a lot of things right.

My father always told me to never bring up politics and religion in conversation unless you wanted an argument. So I take a risk by discussing Ronald Reagan in this post.


I will start off by saying I have both Republican and Democrat friends. I believe the discussions in America are healthy and am glad people have the right to speak their mind. I am not happy with the anger and lies. I don’t like when the debate gets away from the facts and wild statements come out. That is not helpful and actually insulting to most people.


Ronald Wilson Reagan would have been 100 a few days ago. This brought on books, speeches and neo-cons continuing to build the “Myth of Reagan.” I am not saying this is bad. Americans need heroes. America needs to look back at figures and make them larger than life. To do this, they also need to ignore and alter the truth.


This has been done with all out heroes.  JFK’s disappointments outweigh his accomplishments, but the image prevails. Washington, Adams and all the founding fathers did great things but they also were just men and had their faults. Lindbergh had a secret family, Jefferson had children with his slave, Babe Ruth drank like a fish, etc.


My point is not to tear down these men. But to acknowledge that they were just men and had their flaws.


Reagan is looked at by Conservatives today as a great man. They want to name airports and roads after him and put him on a pedestal. People forget that he raised taxes 11 times during his presidency. He ran up record federal spending and debt. He sold weapons to our enemies (Iran) and financed an illegal war in Nicaragua. How can we forget his testimony in front of Congess where he said over and over, “I don’t remember.” I believe he was telling the truth, he didn’t remember.  All signs show that he had Alzheimer’s for most of the second term and possibly the first.


But he was THE GREAT COMMUNICATOR. He was an optimist. He made Americans feel good. He was a symbol of hope. So the policies don’t matter. The actions are not important. What is important is he made us feel positive.


Life is difficult. Times are hard. Leaders reassure us that things will be better. Leaders communicate that sense.


In that definition – Ronald Reagan was a great president. His myth will continue to grow. His negatives in office will be forgotten and the stories will continue to be embellished and white-washed. Is that bad? I don’t know. Today is what it is — there is no way to change it. No reason to harp on it.


As many have said the greatest role Reagan ever played was President. He looked the part. He was brilliant in it. He read his lines perfectly. He pulled it off.


People need heroes and heroes need to be created.


The Reagan Hero Myth is being created and that is just what it is.

Zen of Shoveling Snow

01.29.2011, No Comments, Uncategorized, by .

New York has received record snowfall for January.  It has snowed so much that the older snow has not melted and the new snow just piles up on top.  I don’t own a snow blower. I don’t have anyone come and shovel.  I choose to shovel the snow myself.


Although it can be a pain — shoveling snow is worth every minute.  Besides the obvious exercise and fresh air, it is great for clearing one’s mind.  Snow shoveling uses few brain cells. All one must do is pick it up in one place and drop it in another.


Such simple tasks are good to let your mind wander.


To recharge your brain.


To think of things from a blank slate.


Plus when shoveling snow (as raking leaves and cutting grass), it is very easy to see what you have accomplished.  So much of what we do, the results are not easily seen.  With these simple tasks, it is right in front of us.


So, get out and shovel. Use the time to deal with complex problems – and maybe they won’t be as complex and not a problem.


Solutions can be had by changing mind-sets.  Change the environment.


Focus on the mundane and you might get the breakthrough and solution you are looking for.

Borders Survival Manual

01.23.2011, No Comments, Uncategorized, by .

In my previous post I mentioned some factors that have led Borders Books to the brink of bankruptcy.  The Borders executives have been in NY and talking with publishers for weeks.  I am not privy to any of those conversations but the general buzz in the industry is that this one is much more serious than previous years.


Who knows?  Borders death has been reported for the past five years.  They always seem to come out with enough financial backing to survive another year.  I hope that happens.  But if it does, Borders will need to change to survive.


Some suggestions:


The book retailing world has changed dramatically and all bookstores must adapt to survive.


1)  Selection is not what it once was — Borders prided themselves on having a great selection.  At one time that was an advantage. But physical bookstores can not compete with the selection on the Internet. Borders needs to cut back on selection and focus more on promotion.  I am not saying cut out all the backlist, but it does need to be weeded out.  What is the inventory turn?  How much money is tied up in wallpaper? I was in a Borders last week and they had at least one copy of every Sue Grafton mystery (A is for Alibi…).  She is on U.  Do they really need all of these titles?


2)  Get into the eBook game in a real way — Sure they are way behind in this space.  But this is the growth area in bookselling.  All they need is 2-3% and it will translate into millions of dollars.  Their current play is confusing.  They own 20% of Kobo and have contracted with them to run the eBook store on Borders.com.  That is fine, but I don’t see anything that makes me want to shop at Borders.com.  They need to specialize.  Also, I hope they are not making the same mistake as they did with Amazon and give away their best customers.


3)  Specialize in Children’s items — I like the entries into Children’s books.  The Build-A-Bear and American Girl relationships makes sense.  Borders can create the “go-to” place to bring children.  Parents are always looking for places to take their kids and if Borders can get front of mind for them, they will get repeat visits.  Sell books, videos, games etc.  Many criticized Borders for the Build-A-Bear relationship, but I think it brilliant.  Borders MUST break out of the “bookstore business as usual” to survive.  Building up Children’s is a key driver.  Make it a destination.


4)  Eliminate 400 stores — This may be impossible given long term contracts and agreements.  Over-expansion has hurt many retailers. But supplying all these stores with new merchandise doesn’t make sense.  I wonder if the 80/20 rule can be applied? 80% of the revenue coming from 20% of the stores.  If they can not get out of the additional leases, maybe Borders strips them down and sells remainders? There are warehouses of dead stock that could be cleaned out.


These are just a few thoughts.  I realize the Borders situation is much more dire than this but somethings to ponder.


If Borders survives, they will need to do things differently.  There is no more business as usual because the world has changed and it will never be the same — ever again.

Borders Under Seige

01.10.2011, No Comments, Uncategorized, by .


Over the past few weeks, Borders executives have been in NYC negotiating with publishers.   Many articles have been stated that this is the final chapter for this 40-year old bookseller.   They all focus on eBooks and the poor economy as the reasons.  But I think it is much deeper than that and the problems started a decade ago.


1)      Reliance on old systems – Borders Expert System was the top book inventory system when it was created.  It was one of the main reasons Kmart purchased Borders.   The system worked when they had 20 stores, but it was never able to scale to 200 stores and definitely not 500 locations.  It required too much manual input from the buyers.   Plus, every shipment from publishers had to go through a Borders warehouse and be stickered.   At one time this controlled inventory, but as the industry moved to JIT replenishment, this cumbersome system slowed everything down.  It generally took Borders 7-10 days longer to get books back in stock.


2)      Not understanding the Waldenbooks asset – Waldenbooks was folded into Borders once Kmart had purchased both.   At the time Waldenbooks had 1200 locations and was 10x larger than Borders.   But the future was in the 25,000 square foot ‘superstore’ concept and not the 3,000 square foot mall based Waldenbooks.  All of the cash WB made was spun into Borders growth.  I am not arguing with that decision.  But they should never have tossed WB aside.  Borders never understood the WB model.  They tried to create “Borders Lite” mall stores.  Basically taking a Borders inventory mix and shrinking it.  Mistake.   WB thrived on Romance, Mystery, Sci-Fi and Children’s.   They sold mass market books.   They had loyalty programs of readers in the millions.   All were disbanded.


3)      Missed the Internet – Possibly Borders biggest error was to turn over their internet business to Amazon.  At the time, Amazon was very small and Borders was challenging B&N for the largest bookseller in the country.  But Borders partnered with Amazon and basically sent their best customers to the competition.   Borders had tremendous customer loyalty and from Waldens, the Preferred Reader Program of over 3-million frequent buyers.   Amazon took all of them and has destroyed any Borders on-line efforts.   By the time Borders pulled the on-line store back, it was too late.


4)      Location, location, location – During the rapid growth days of the superstores, I would go on numerous road trips to visit bookstores.  It always seemed that when a B&N and Borders were in the same area, the B&N had a better location.   I don’t have statistics, but when there was a side by side comp, the B&N always seemed busier.


5)      Music and Video – Borders jumped into music and video just as that industry was taking a hit from on-line and digital downloads.  They may have had a few good years, but in the long run they ended up with massive amounts of old technology in physical cds and dvds – where the market had moved away.


6)      Bunkering in Michigan – I like Ann Arbor.  I always enjoyed visiting and impressed with the people.  But they should have stayed in the NYC area.  The talent pool is much larger for publishing and bookselling in the NYC-area.  Plus I know of a few instances that very talented people wouldn’t even consider Borders because they didn’t want to leave NYC.   Borders also missed out on what was happening in the publishing industry.  Would always see the B&N people at meetings and events because they were local.   It is less of an issue today but 15 years ago, it made a huge difference.


7)      Hoard information – For many years Borders refused to share sales information with the publishers.  B&N openly allowed publishers sales and started to coordinate re-orders etc with them.  This allowed B&N to get a jump on Borders for re-orders of hot titles.   I can remember feeling good when I confined my contact at Borders to fax us the top 100 titles instead of 50.   No inventory numbers though.  By keeping this information closed, Borders hurt their own case for getting re-orders and they also lost valuable days.  B&N could make a decision and get books to market in 3 days, Borders would still be thinking about it.


Having the revolving door in the corner office and not investing in eBooks are just the latest issues.   I want Borders to survive.  I believe they can survive.  But they must completely revamp.  The brand is strong and there is definite value.   But the current “business as usual” attitude will only drive them deeper into the hole.    There are many steps Borders needs to take to survive.   Maybe in the next blog post?

Apple, Google and Amazon…

12.13.2010, No Comments, Uncategorized, by .

The book publishing industry has changed dramatically over the past three years.   Once it was dominated by the publishers.   They were the ones who controlled the content.   Publishers decided what would be published, what was “good”, what the price would be and where the books were to be sold.


Then the retailers started to get more influence and power.


First came the mall-based chains, Waldenbooks and BDalton’s.  At their peak, there were over 2,000 combined locations.  The rise of the “mass market hard-cover” was born.  Authors like Danielle Steel, Stephen King and Tom Clancy benefited.  Their books were in the front of every store in every mall in America.  Also, genres like Romance, Mystery and Science Fiction all exploded in sales.


Then as the mall stores waned, the corporate Superstore was born.   B&N and Borders led the way.   These stores were outside the malls (although some are anchors at malls) and carried 4-5x the selection of a mall store.   They also added in coffee and music and stationary.  The superstore model was dynamic and continued to grow for twenty years.


But, now both B&N and Borders are struggling.   The idea of selection is no longer having more in a physical book store.   Selection is online where there are unlimited options.   Selection is also starting to mean eBooks.


eBooks are the growth area for publishing.   But instead of the publishers dictating terms, the retailers are now in control. A battle is on for the reader and it is between three massive corporations.


Amazon — wants everyone to buy from the Kindle store.   Kindle is a closed system and books bought from other places are not allowed in.


Apple — wants to sell everyone an iPad.   Although they have their own iBookstore, they have allowed Amazon, B&N and others in.   So, although they want to sell books, it is more about selling hardware.


Google — wants to sell you ads.  They want to enhance the “Search.”   So, their goal is to sell that service and use the content inside books as part of the complete search function.  They will sell you eBooks too, if you want.


Will be interesting to see how this all plays out.  B&N nook, Kobo, Sony, and a few others are playing in this arena — and there probably will be a new competitor emerge.  But in the end, Amazon, Google and Apple have the deepest pockets.


NOTE:   In an effort to keep this post brief, I passed over the important impact of Department stores; Indies; Costco; Wal-Mart; Crown; Target in the evolution of book-selling.

December 1

12.01.2010, No Comments, Uncategorized, by .

The final month of the year is upon us.  2010 is in the final chapter.


It always seems like the year just passes by.   Before one notices, it is DEC and only 24 days to Xmas.   Have you started shopping yet?


The advent of on-line shopping has dramatically changed my habits.  I actually prefer to do all my shopping on-line if possible.   I don’t mind going into stores and browsing and people watching.  But I hate waiting in line.  I also always feel the prices must be better on-line.


I downloaded an App called “Amazon Price Check” to my iPhone.  It allows you to scan the barcode and will price check it against all offers on the web.   Well, maybe not all, but many of them.   I love this App.  It is a way for Amazon to use other people’s stores to sell their items.  But I use it more for the fun of scanning and seeing what the options are.


I hate trying to find the right size at stores.  So much of the time, you can find the style you want but it is a crap shoot getting the size.   On-line shopping is perfect.   The size may not be in stock, but it is easy to find out.   Plus the selection is dramatically better.

Do You Like Green Eggs and Ham?

11.20.2010, No Comments, Uncategorized, by .

I was re-reading GREEN EGGS AND HAM to my daughter this morning.   I have probably read this book 1,000 times over the years (including many hundreds of times when I was a child).  I just love this book.   Dr. Seuss was a genius.   Not many books sell as many today as it did 40 years ago.


But what struck me about the book today is what a great sales-person SAM-I-AM is.


First he is selling an unappealing product.   Green Eggs?   Ugh!    But he persists.  The other dude (does anyone know his name?) is a grouch.  He doesn’t want to see Sam-I-Am at all.  He just wants to read his newspaper and to be left alone.   But Sam-I-Am insists.  Every time the other dude says no, Sam-I-Am comes back with a new option.  How about with a Fox?   In a Car?   He won’t stop.  He is relentless.


Finally, Sam-I-Am gets the other dude to try.   By now these green eggs and ham are soggy, cold and been near mice, goats and other vermin.  But the other dude still tries them.  And guess what?  He likes Green Eggs and Ham!!!


So, I want Sam-I-Am on my sales force.    But did the other dude ever try the ham too?


Starting to read articles about BLACK FRIDAY plans of the retailers.  The day after Thanksgiving where the retailers tease and manipulate consumer behavior.  Get here at 7 AM and get a DVD player for $10!   Trample over people to save a few bucks.  It really brings out the worse it people.   But it drives sales.  It is the un-official kickoff for the make or break time of the year.


All the reporters and pundits will predict the entire Holiday season with just data from BLACK FRIDAY.


But that didn’t work for on-line retailers.   So CYBER MONDAY was created.   I don’t know if people look at this day as the one to shop on.  I think originally it was on Monday because most had high-speed connections at work but not at home.


This year, because of the massive amounts of iPads; Kindles; Nooks and other eReading devices that will be sold.   Everyone from Wal-Mart to Best Buy to Brookstone are selling eReaders.   So what will happen on DEC 25th when all of these new toys are opened?   People will buy an ebook or two.


I predict that DEC 25 will be one of the biggest single days for eBook sales.  Traditionally DEC 25 is not a good day for retailers.  It will be different in eBooks this year.

Parking Tickets

11.06.2010, No Comments, Uncategorized, by .


I have received more parking tickets in the past year than in the previous 20 years of driving.  I have not changed my habits or parking in different places.  I believe it is extra enforcement because of the tight city and town budgets.   So, how do they get revenue?   Start writing tickets.


I have received eight tickets from six different towns.   One time I just stopped by for two minutes to drop something off  and got nailed.   Another time, I paid for two hours (at 25 cents every 15 minutes) and received a ticket at 12 minutes past the two hour limit.


Technically I am guilty.   I get it.   I don’t have a leg to stand on in court.   Yes, I was over the limit.  I almost always pay for parking.   I run late every now and then.  But there is no leeway anymore.   It is just part of the harsh attitudes people (via government) have towards one another these days.


The other thing that is oppressive about parking tickets is they give you 30 days to pay or it doubles.  If you are late beyond 60 days, it doubles again.  Plus the tickets themselves have gone up.  I regularly pay $25 a ticket — wait a few months and it can be $100.   Just for an extra 10 minutes!  It is horrible.


Again, I know I am guilty of ‘stealing time from the parking spots.’  So I have to pay.  But what happened to a little leniency?   I am not intentionally trying to get one over — most of my tickets have come from doing a bit more work or shopping in the stores.   I have actually stopped going to certain towns to shop because of the parking.  I have started shopping in towns with free parking or those without these over-zealous parking commissioners.


Maybe in the long run the revenue from lost sales taxes (because less people will want to deal with the parking) will overcome the extra parking violations.   Or maybe not.  But it seems like this policy is just one more way of the government taking money from people and creating nothing of value to help the economy.


Unintended consequences?