Borders rakes in fresh cash (and says good-bye to Australasia)

[Alexander Turcic]

It's not a secret that earlier this year, troubled Borders hired a pair of Wall Street investment banks to explore "strategic alternatives," including a sale of the company. Luckily (for them), a sale has been avoided so far. Instead, the bookstore chain announced today that it would sell its 30 superstores in Australia, Singapore, and New Zealand to the area's leading book retailer.

Upon closing of the transaction, Borders Group will receive proceeds of approximately $95 million (AUD) or approximately $90 million (USD based on current exchange rates). Additional deferred payments of up to $15 million (AUD) or approximately $14 million (USD based on current exchange rates) will be paid to Borders Group on or about March 31, 2009 if certain performance targets are achieved.

And what should they do with an additional financing of around $90 million, besides reducing their debt?

The Motley Fool has the answer (on the off-chance it didn't immediately pop to your mind):

Borders isn't going away, but times have changed in the bookselling industry... Online discounters like Amazon.com and Overstock.com are now chiseling away at the big-box bookstores' market share. Superstore chains will also eventually worry about e-book readers like Amazon's Kindle and Sony's Reader, since digital delivery has little need for an old-school intermediary.

Instead of paying down its debt, Borders should earmark those funds to dream up a Kindle killer while Amazon's reader is still vulnerable in the crib. Absent that, bookselling superstores will only continue to fade in relevance. If Borders doesn't evolve, losing a foothold in Oz will be the least of its worries.

[zelda_pinwheel]

oh my. if "the area's leading book retailer" is Dymock's, i can think of at least two people around here who are going to cry.

on the other hand, if Border's *does* invest in research to create a new device that could be quite interesting...

[vivaldirules]

My uninformed opinion is that Borders has been on life-support for years and it's only a matter of time. Too bad because I like them in some respects. They just don't seem to be able to find a niche for themselves and they dumbly just plod along in a losing battle with B&N and Amazon. Of course, I said the same thing decades ago about both Sears and KMart and they're still breathing somehow (but together, which I find amazingly hilarious; maybe they'll buy Borders!).

[Alexander Turcic]

... a $90m e-book device... now I could think of some ways to beef up the Kindle reader

[RCR]

I don't know if Motley Fool has the right answer.

If Borders flunked at real book store management, why would they do any better on-line?

And anyway, are Amazon and Sony making such humongous profits in the e-book business that there's room for Borders?

[dgillette.rm]

The trick is I got my Weekly Borders email today and they had a link to the "Sony ebook store at Borders". I could not tell from the link if they were selling ebooks, or just selling readers, but it sure looked like they were gearing up to sell ebooks.

[Walk Broad]

Originally Posted by dgillette.rm

The trick is I got my Weekly Borders email today and they had a link to the "Sony ebook store at Borders". I could not tell from the link if they were selling ebooks, or just selling readers, but it sure looked like they were gearing up to sell ebooks.

Border's would have to make a serious run at Fictionwise which seems to be doing pretty good in the e-book retail space, maybe even better than Amazon.

The Kindle may garner the headlines, but it's mostly for the device, not the content - at least at this point. That's what I think the Motley Fool is mostly saying.

Still, I think Border's has slipped down far enough off the radar of most people that it would be like trying to strap on a parachute after you've already jumped out of the plane.

[montsnmags]

Originally Posted by zelda_pinwheel

oh my. if "the area's leading book retailer" is Dymock's, i can think of at least two people around here who are going to cry.

No, it's Angus & Robertson, the other biggie, and they were once my favourite pre-Borders but they've seemingly stagnated and declined - their stores can have a tendency to look like $2 shops, and they frequently seem to have the old "tables full of books on sale" in large shopping centres, which doesn't contribute to an image of being a "bright light in book selling" (though the sales figures tell a different story). I reckon they needed to buy Borders to get back in though, as I suspect Dymocks were pushing forward and into so many markets. If they absorb the "modern book store" quality and thoroughness of Borders, I don't think it can hurt them. I hope not. I hope they grind their coming success into the face of Dymocks.

Dymocks pulled out of the tender I think late last year. If they'd "won", I would be shouting "LIGHT YOUR TORCHES AND GRAB A FARM IMPLEMENT, PEOPLE. IT'S TIME TO GO MOB-RULE ON A BOOKSTORE CHAIN!".

Incidentally, the best, largest, most thorough, most organised book store I have ever been into in Australia? Kinokuniya, in Australia only located in The Galeries Victoria in Sydney. It's a book-browser's dream.

Cheers,
Marc

[Someguy]

Maybe its just me, but it always seems that both Borders stores in my area are busy.
But it would be nice if they got into the E-book buissness.

[lee1234]

I just hope Borders get into the ebook device market like Amazon Kindle, so that we can have more choices to choose from. Hopefully, the price of ebooks will drop because more companies are involve in the ebook device.

[bbusybookworm]

I have to say that here in the UK, Borders was a life line for me.

I spent hour and hours in my local Borders (In Brighton), and ended up spending a bloody fortune in books, as I wanted to finish the book as the store was closing .

And at that time the only alternative was the local Waterstones, which while large, did not have an as large SF and Fantasy collection. and forget about Graphic Novels.

Waterstone's has improved a lot since then, possibly in reflection to its competition, but Borders was my favourite, and was I depressed when I shifted to a town which did not have a store.

But as previous posters have suggested, it would be cool if Borders got into the E-book game. And while Sony may seem a logical partner, due to their past relationship, I would like it more if they had a more open device that supported something like Mobipocket.

[6charlong]

I guess it’s hard for people to see beyond the past.

With eBooks, editions equals formats. A bookstore that only sold books by one publisher would go TU, so why would an eBookstore sell only one format? Why wouldn’t Borders follow the successful example set by Fictionwise and sell books in every common format? Disk space is cheap and getting cheaper, the opposite of paper--so is it publishing's past that's confusing management?

And while Borders sells the Sony PRS in their brick-and-mortar stores, they need to get aggressive with eBook reader manufacturers and sell Astaks, Cybooks, Iliads, and whatever else comes along through Borders OnLine; plus the formats those devices can display--assuming Borders wants to become the go-to place for books. But they have to act before Amazon realizes their mistakes with the Kindle.

No one seems willing to answer the question: what is a publisher? Isn’t the role of publishers to: find and develop authors; edit promising manuscripts; arrange the layout, printing and distribution of the books they pick-up, and finally promote their books? When books are published as eBooks over the Internet how are offices connected by the Internet different than offices connected by a Local Area Network in the same New York City office building? Why can’t Borders enhance the talent they already have and develop publishing units across the world?

We need to learn from the past without becoming its slaves. The "greatness" of the supposed “Greatest Generation” was only in that they were willing to think big and take big chances. After the risks they took in The War, any risk these people confronted in business seemed trivial.

I like Borders and wish them well. I hope they will take the opportunity fate has pushed on them.

[SpiderMatt]

So sad. I enjoyed that Borders in Singapore. When I was based in Korea I took a trip to Singapore and that Borders was the first English bookstore I had stepped into in many, many months. As you can imagine, I was overwhelmed and oh so pleased. :-)

[Laine]

In Sydney Angus & Robertson and Borders are about 3 doors away from each other so I guess that means they close it. Funnily enough Dymocks in the city is better than A&R for everything I buy. A&R is the pits but they are renovating or moving - I forget what they said. Maybe they'll keep the Borders and have different sections?
In the local shpping centre A&R loses out to Dymocks too.

[montsnmags]

Originally Posted by Laine

In Sydney Angus & Robertson and Borders are about 3 doors away from each other so I guess that means they close it. Funnily enough Dymocks in the city is better than A&R for everything I buy. A&R is the pits but they are renovating or moving - I forget what they said. Maybe they'll keep the Borders and have different sections?
In the local shpping centre A&R loses out to Dymocks too.

I think the description of "renovating or moving" describes perfectly the impression A&R give in most of their stores. The Pitt Street Mall store was once my favourite, but I began to find myself passing it by. I used to love starting in Borders, going to A&R (or starting there, pre-Borders), as you say a couple of stores up, (though I went there less and less), then walking through the Mid City Centre to Dymocks, George Street (which, I admit, despite my raging against them, was a good store for bookrange if not for service), then on the way home do a little detour to Galaxy before stopping in Kinokuniya (a marvelous, wonderful book store! Have you been there?). It was book-browsing nirvana.

Where I live now, the best browsing I get is from the internet or visits to Westfield when I visit my brother, neither of which is the same.

Here's hoping A&R are "recreating" themselves by using the Borders stores as a jump back in and jump off point. I found most of the Borders I've visited in Australia to be quite excellent for book-browsing. It would be nice if A&R were "born again" in that image, rather than the "renovating or moving" image they seem to display these days.

Cheers,
Marc