Earlier this week, Borders reported that they lost $328 milion in the month of July alone. This is a record for the fallen bookstore chain, which is mainly attributed to the steep markdowns of remaining merchandise. The company showed a total of $94.7 million in sales for the month.
And, unfortunately, Borders’s existence will end with a pathetic whimper. As the stores finally begin to wink out of existence, we’ll see the losses continue to compound, and the sales will continue to fall, despite rapid liquidation. Many will try to spin this situation as a failing of brick and mortar stores, of standard books, and even of the standard models of distribution. However, Borders is a distinct, unique case. Borders as a company was run poorly, and made mistake after mistake.
The chain’s biggest mistake was its insistence on keeping unprofitable stores open. At the time of Borders’s bankruptcy, the Wall Street Journal reported that as many as 30% of the chain’s stores were unprofitable, and drained upwards of $2 million from the company as a whole. This was mainly due to Borders’s insistence on maintaining unreasonable leases, some of which had non-negotiable rents, and others with lease periods as long as 15 to 20 years. Combine this with disastrously bad expansion attempts, an incredibly late entry to the online market, and incredibly poor employee treatment under CEO Ron Marshall.
The company was so firmly entrenched in the Red Ocean, and blinded by short-term profits, short-term gains that it was eager to jump into decisions that any businessman would call stupid at best, and retarded at worst. Unfortunately, these gambles didn’t pay off, and instead blew up in the face of the company at the worst time, every time. Because of these setbacks, these mishaps, the company simply didn’t have a chance, and was slowly eaten alive by forces from within, and from the outside.
As Borders’s story comes to a close, the manga industry’s is simply beginning to get interesting. The coming months will be fascinating, telling even, as we see if the industry learned from the anime industry’s mistakes. We will see if they prepared well enough for this inevitable fallout.