Quote:
Originally Posted by SensualPoet
The closing of Borders certainly won't hurt B&N but it won't pick up 100% of its sales, either. Borders represented less than 15% of trade book sales in 2010 in the US; for a variety of reasons -- including distance from a closed Borders store -- B&N is likely to see a 3 or 4% lift in US marketshare -- as much as 15% at the bricks and mortar side of the business. Or perhaps very little at all, depending on the economy and further consumer adoption of ebooks.
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Best case, theoretical, scenario for B&N would be about half of Borders' share, given the quoted 75% overlap of sites. So B&N could add up to 7% extra share and get to 30%. Maybe more if they pick over the carcass for a few choice sites.
Amazon's share of Borders' business is going to come mostly from the orphaned regions without B&N overlap and what little online sales they had, so I doubt they'll pick up more than 3-4% that way. However, they have been growing their share faster than anybody, so getting to 20+ percent should be easy.
So far, ebook mainstreaming hasn't impacted the print business much but that isn't going to last. Given the adoption rate of dedicated readers for the last year, I think ebooks should be able to hit 30-40% unit sales penetration in a year or two and that is definitely going to require cannibalization and lead to a likely dollar volume contraction, which is why nobody is eager to bid much for Borders' business. All those $2.99-6.99 ebooks are going to wreck havoc on industry median prices. Already are, no?
With the winds blowing that way, it really doesn't make much sense to be getting into the print book side of the business if you're not already in it. Even Najafi was most likely looking to Borders as a trampoline to digital sales more than a long term business unto itself.
At this point, odds are the Borders name is probably the most valuable asset in the liquidation.