Possible merger of Borders with Barnes and Noble

Bob Russell · 02-22-2007, 06:35 AM

Some large investors can have significant impact on how businesses are run. After all, large corporations are supposed to be operated in the best interest of the stockholders. This can often be quite a headache for CEOs when "outsiders" decide they have a better business strategy and start to push. Such strategies can also be very short sighted, focusing on short term stock price gains at the expense of long range health.

Apparently, Borders and Barnes and Noble may be facing such pressure to merge. "Pershing Square Capital Management, known for its activism, holds a 11.5 percent stake in Borders and a 9.2 percent stake in Barnes & Noble and could argue that a combination of the two retailers would strengthen the businesses."

Some questions come immediately to mind as a consumer:
1) Would this mean sales locations of the Sony Reader would be expanded or contracted?
2) What will the online book and e-book strategy become?
3) Will selection and prices suffer if the two become one?

From Seeking Alpha and The Book Standard.

Leaping Gnome · 02-22-2007, 09:34 AM

Well seeing as B&N and Borders are really the only national brick and mortar competitors to each other, a merger would almost certainly not be a "win" for the consumer. I would not expect this to happen.

RWood · 02-22-2007, 10:09 AM

At least here there is still Book-A-Million. I think it will happen and it will not be bad for us. They will still face the competition from Amazon and perhaps prices will go even lower if Amazon has a larger national chain to worry about.

Look at it from another view, they see the future and it is not pbooks. Amazon is better positioned to deliver ebooks tomorrow as they do pbooks today.

Envision this from the future, you walk into the Boarder & Nobles and select several books that you can glance at on the shelves. You swipe a wand on the back of them and proceed to the checkout. There a clerk takes your wand, ebook reader (we service all readers), and your credit card. A moment or two later the books are in your reader, your account is charged, and you're on your way out of the store.

Dick Tracy · 02-22-2007, 09:07 PM

Quote:

Originally Posted by RWood

Envision this from the future, you walk into the Boarder & Nobles and select several books that you can glance at on the shelves. You swipe a wand on the back of them and proceed to the checkout. There a clerk takes your wand, ebook reader (we service all readers), and your credit card. A moment or two later the books are in your reader, your account is charged, and you're on your way out of the store.

Any reason why this couldn't happen at Starbucks (or their competitors), the gas station, and the subway station ticket machine? Heck, why not have the magazine section of the supermarket replaced?

Azayzel · 02-22-2007, 11:30 PM

All I have to say is... "OUCH!" I definitely do not think that this merger would benefit consumers in the very least, all it will do is put more capital in the shareholder's pockets that have joint stoacks in each; i.e., no competition between the two any more. Now, as to why I don't think it is a good idea... first and foremost is that any time two very large companies merge, the consumer looses out by the lack of competition and the, now single, company can set prices as they please, giving the consumer a lack of recourse where previosly they had one. I'm not totally discounting smaller mom-and-pop joints, but we all know that larger companies can afford to purchase more in bulk, thereby offering better discounts/incentives. Yet another reason I do not like the taste of this merger is that in the past I knew if I couldn't find it at Borders, I could go down the street to B&N and possibly find it there. Also, each company tended to have a bit varied selection and one would offer more of a specific subject matter than the other.

Just my two-cents. While the Reader was referenced, i don't feel that the merger will help spread the device any more than it already has, since many of the chains are located close to each other and something would have to give; i.e., seeing some close, esp. those that are right across the street from each other.

I did like the analagy that Dick Tracy envisioned, with the purchase swipe idea; however, why not put this better and say you're browsing an eBook store on your phone, find a book, pay nominal fee, d/l & save to the SD card in phone, and transfer this to your Reader? This would totally cut out the middle-man. Of course, the main reason I wallk into a physical bookstore is to simply browse and flip a few pages to see what's new; I can't see myself doing this if everything is digital (unless they have some type of eReader you can pickup in-store and carry w/ you to check out actual content.

mdbenoit · 02-23-2007, 01:23 PM

I thought the article would interest my publisher Zumaya Publications, and here's her comment (reprinted with permission):

"Sadly, it wouldn't surprise me if this happened, and it would very
much be a bad thing for publishers and authors. It would "Wal-
Martize" the industry, in that they would then have the clout to
demand deeper and deeper discounts from publishers who depend on that
kind of distribution. I know it bugs people that I'm not more active
trying to get our books into the chains but that's why. In the end,
it would run us right into the ground, just like Wal-Mart did to
Rubbermaid.

Perhaps worse, the consumers would rejoice because of the
monopolistic price decreases--never realizing that they are being
treated to de facto censorship, since only the publishers willing to
kiss corporate butt would get their books stocked."

QueridaNegra · 02-23-2007, 02:38 PM

NOOOOOOOOO. I love Barnes and Noble (despite the fact that they don't stock Readers). Borders and I have had a tumultuous relationship at best. I don't want BN Borderized (and I HATE HATE HATE Border's website. If I wanted to go to Amazon.com, don't you think I would have typed that instead??)

BooksForABuck · 02-23-2007, 02:51 PM

The bookstore business, and indeed the book business is in trouble. In such times, consolidation is natural. I can't see this as being good for books overall. In the short term, it might be great for eBooks, though. Consolidation would mean fewer bookstores, higher prices, and less selection at the bookstores, meaning more reason to shop for eBooks. In the long term, though, I think it would mean less reading.

While we can charge up our eBook readers (or PDAs) at BN or Starbucks or at home, it's nice to have somewhere to go, get out of the house, have a cup of coffee, and wander the stacks looking for the serendipitous find.

Rob Preece
Publisher, www.BooksForABuck.com

bingle · 02-23-2007, 06:26 PM

Quote:

Originally Posted by QueridaNegra

NOOOOOOOOO. I love Barnes and Noble (despite the fact that they don't stock Readers). Borders and I have had a tumultuous relationship at best. I don't want BN Borderized (and I HATE HATE HATE Border's website. If I wanted to go to Amazon.com, don't you think I would have typed that instead??)

Huh, I honestly can't tell the difference between the two. They seem pretty indistinguishable already. I would even be surprised if there were much difference in the titles they carry. Of course, this would be bad for the consumer, but I don't think it would affect ebooks in any noticeable way.

I think any real differentiation in bookstores ended a while ago, with the gradual death of most of the little independent/used bookstores.

NatCh · 02-23-2007, 06:39 PM

Quote:

Originally Posted by bingle

I would even be surprised if there were much difference in the titles they carry.

This is subjective, of course (and mostly based on the SciFi/Fantasy sections, to boot), but it seems to me that B&N will generally carry more titles, but fewer copies of each, and will have "older" titles (ones that have been out a while, but aren't out of print, so it's easier to fill out your back series titles there). Borders on the other hand, tends to have mostly newer stuff, and in larger numbers of copies per title. B&N has better seating in the stacks, usually, but Borders' Italian Sodas are tastier.

Liviu_5 · 02-23-2007, 06:58 PM

Quote:

Originally Posted by NatCh

This is subjective, of course (and mostly based on the SciFi/Fantasy sections, to boot), but it seems to me that B&N will generally carry more titles, but fewer copies of each, and will have "older" titles (ones that have been out a while, but aren't out of print, so it's easier to fill out your back series titles there). Borders on the other hand, tends to have mostly newer stuff, and in larger numbers of copies per title. B&N has better seating in the stacks, usually, but Borders' Italian Sodas are tastier.

I guess it depends on the local stores. My experience is opposite, outside of the big B&N flagships at 14th and 63rd in Manhattan, I found the "regular" Borders store (and I have 3 within 20 minutes driving, leaving aside my favourite 2 ones in the city at 57th and on Broadway/Wall Street - former WTC, respectively) much better stocked than the "regular" B&N ones.

On the other hand since Borders cafe changed from Starbucks to ?? (forgot the name), I had an overall better experience at the B&N cafe.

Anyway I doubt any such merger will be approved beacause of antitrust concerns.

Cthulhu · 02-24-2007, 03:17 PM

I have never been a big fan of Barnes & Noble, and it started in college when I read an article that B&N owns a number of university bookstores. That right there was enough. In the article was a story, now hearsay since I cannot produce it, that B&N Uni. bookstores would brook no competition and would slash prices until it ran a rival out of business, then ramp the prices up once more.
I concur that Borders' website should state "We find that synergy is great, and coupling with Amazon lowers our overhead, our prices, and our workload. So go there." The ridiculous "re-branded" website really irks me.

So I have not been inside a B&N store since 1996. Every time I go to a Border's, I get all antsy; there's just too much, and I grow weary of not finding older titles, only the new literary hotness. Case in point: I was looking for a couple of books written by a Simpson's series writer. The one work available was out of print (I think it was five years old) and I could have it for the steal of a price $124.95.

I am sure this rant has come up before, but why is it that I can purchase a huge pile of CD's that contain audiobooks, but not a single CD with an ebook, or better yet, why is there no cute display of SD cards with various and sundry titles on them?

It seems to me that Publishing companies despise e-books and lament the day they ever allowed the format, and that large Bookstore chains share this disdain. I find it ludicrous that Border's sells the SONY Reader, but absolutely no content for it.

If Border's and B&N merge, there will be little to distinguish between the change, save that pricely may very likely increase for most of the titles available, and smaller press books may be omitted. The only way most smaller, independent bookstores can survive these day is a dedication to a particular genre or niche.

Anybody know of any really cool electronic bookstores that let you bring in coffee?

sea2stars · 02-24-2007, 10:23 PM

Any cool electronic bookstores that let me bring in coffee? Besides my living room with the laptop in it?

I've always liked Borders more; probably because I worked at a B&N during and a few years after college. It was one of the first "superstores", even though it didn't have a cafe or sell music. It actually closed a few years ago; unable to compete with a larger B&N, Borders and Amazon. I was forced to wear a corporate yoke... er.. a tie, and envied the kids in their jeans and t-shirts over at Borders. *sigh* I sure miss the 40% discount during the holidays when I'd horde books wherever I could.

If the two do merge there will certainly be a reduction in selection; if only for the simple reason that the two companies have a tendency to build their edifaces as close to each other as possible and stores will be closed.

If Borders & Noble happens, I think they'll have even less of an incentive to sell ebooks. Both B&N and Borders reluctantly started online sales in the late 90's; I doubt they had much choice in the matter. I doubt they'll ever see ebooks as the same sort of competition that online sales created, and with one less kid on the block... *shrug*

Eh. I'll stick to my favorite used book stores, online used books stores, my current ebook infatuation and Amazon.

mdbenoit · 02-25-2007, 07:39 AM

Quote:

Originally Posted by sea2stars

Eh. I'll stick to my favorite used book stores, online used books stores, my current ebook infatuation and Amazon.

Being in Canada, B&N isn't really an issue, but three years ago the mega bookstore Indigo bought out the mega chain Chapters. Since then, we've seen a reduction in selection of more "obscure" books, an emphasis on bestsellers, junk selling (soap, cards, candles, etc.). Definitely not an improvement, and I can't help thinking that someone out there is making choices for me on what I should read.

So, for pbooks, I use mainly my public library. The only books I will buy are ebooks, usually from eReader, Mobipocket, or Fictionwise. But now I just heard that amazon bought Mobi. It'll be interesting to see if they start influencing the selection.

sea2stars · 02-25-2007, 11:20 AM

I guess it comes down to the fact that it's the rest of the consumers out there, who are the ones making the decisions for us in the corporate world. Whatever sells the best is going to be carried the most in a store, and everything else will be slowly whittled down to the bare minimum. When I first started working at B&N I couldn't believe how many paperback books were "stripped" each year. A book being stripped when the cover is torn off, sent back to the publisher, and then "destroyed"/thrown out at the store. And we were a small store.

I didn't realize that Mobi was acquired by Amazon.. then I looked it up to realize that it happened almost two years ago.

02-22-2007, 06:35 AM	#1
Bob Russell Recovering Gadget Addict Posts: 5,381 Karma: 676161 Join Date: May 2004 Location: Pittsburgh, PA Device: iPad	Possible merger of Borders with Barnes and Noble Some large investors can have significant impact on how businesses are run. After all, large corporations are supposed to be operated in the best interest of the stockholders. This can often be quite a headache for CEOs when "outsiders" decide they have a better business strategy and start to push. Such strategies can also be very short sighted, focusing on short term stock price gains at the expense of long range health. Apparently, Borders and Barnes and Noble may be facing such pressure to merge. "Pershing Square Capital Management, known for its activism, holds a 11.5 percent stake in Borders and a 9.2 percent stake in Barnes & Noble and could argue that a combination of the two retailers would strengthen the businesses." Some questions come immediately to mind as a consumer: 1) Would this mean sales locations of the Sony Reader would be expanded or contracted? 2) What will the online book and e-book strategy become? 3) Will selection and prices suffer if the two become one? From Seeking Alpha and The Book Standard.

02-23-2007, 02:51 PM	#8
BooksForABuck Zealot Posts: 123 Karma: 150001 Join Date: Dec 2004 Location: Long Beach, CA Device: Color Nook, Kindle 2, Palm III, eBookWise, HP Jornada	Mergers and Bookstores The bookstore business, and indeed the book business is in trouble. In such times, consolidation is natural. I can't see this as being good for books overall. In the short term, it might be great for eBooks, though. Consolidation would mean fewer bookstores, higher prices, and less selection at the bookstores, meaning more reason to shop for eBooks. In the long term, though, I think it would mean less reading. While we can charge up our eBook readers (or PDAs) at BN or Starbucks or at home, it's nice to have somewhere to go, get out of the house, have a cup of coffee, and wander the stacks looking for the serendipitous find. Rob Preece Publisher, www.BooksForABuck.com

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02-22-2007, 09:34 AM	#2
Leaping Gnome Evangelist Posts: 490 Karma: 1641 Join Date: Oct 2006 Location: Louisville Device: Sony Reader PRS-500	Well seeing as B&N and Borders are really the only national brick and mortar competitors to each other, a merger would almost certainly not be a "win" for the consumer. I would not expect this to happen.

02-22-2007, 10:09 AM	#3
RWood Technogeezer Posts: 7,233 Karma: 1601464 Join Date: Nov 2006 Location: Virginia, USA Device: Sony PRS-500	At least here there is still Book-A-Million. I think it will happen and it will not be bad for us. They will still face the competition from Amazon and perhaps prices will go even lower if Amazon has a larger national chain to worry about. Look at it from another view, they see the future and it is not pbooks. Amazon is better positioned to deliver ebooks tomorrow as they do pbooks today. Envision this from the future, you walk into the Boarder & Nobles and select several books that you can glance at on the shelves. You swipe a wand on the back of them and proceed to the checkout. There a clerk takes your wand, ebook reader (we service all readers), and your credit card. A moment or two later the books are in your reader, your account is charged, and you're on your way out of the store.

02-22-2007, 11:30 PM	#5
Azayzel Cache Ninja! Posts: 643 Karma: 1002300 Join Date: Jan 2007 Location: Tokyo, Japan Device: PRS-500, HTC Shift, iPod Touch, iPaq 4150, TC1100, Panasonic WordsGear	All I have to say is... "OUCH!" I definitely do not think that this merger would benefit consumers in the very least, all it will do is put more capital in the shareholder's pockets that have joint stoacks in each; i.e., no competition between the two any more. Now, as to why I don't think it is a good idea... first and foremost is that any time two very large companies merge, the consumer looses out by the lack of competition and the, now single, company can set prices as they please, giving the consumer a lack of recourse where previosly they had one. I'm not totally discounting smaller mom-and-pop joints, but we all know that larger companies can afford to purchase more in bulk, thereby offering better discounts/incentives. Yet another reason I do not like the taste of this merger is that in the past I knew if I couldn't find it at Borders, I could go down the street to B&N and possibly find it there. Also, each company tended to have a bit varied selection and one would offer more of a specific subject matter than the other. Just my two-cents. While the Reader was referenced, i don't feel that the merger will help spread the device any more than it already has, since many of the chains are located close to each other and something would have to give; i.e., seeing some close, esp. those that are right across the street from each other. I did like the analagy that Dick Tracy envisioned, with the purchase swipe idea; however, why not put this better and say you're browsing an eBook store on your phone, find a book, pay nominal fee, d/l & save to the SD card in phone, and transfer this to your Reader? This would totally cut out the middle-man. Of course, the main reason I wallk into a physical bookstore is to simply browse and flip a few pages to see what's new; I can't see myself doing this if everything is digital (unless they have some type of eReader you can pickup in-store and carry w/ you to check out actual content.

02-23-2007, 01:23 PM	#6
mdbenoit Enthusiast Posts: 39 Karma: 36 Join Date: Feb 2007 Location: Ottawa, Canada Device: Palm Zire 71	I thought the article would interest my publisher Zumaya Publications, and here's her comment (reprinted with permission): "Sadly, it wouldn't surprise me if this happened, and it would very much be a bad thing for publishers and authors. It would "Wal- Martize" the industry, in that they would then have the clout to demand deeper and deeper discounts from publishers who depend on that kind of distribution. I know it bugs people that I'm not more active trying to get our books into the chains but that's why. In the end, it would run us right into the ground, just like Wal-Mart did to Rubbermaid. Perhaps worse, the consumers would rejoice because of the monopolistic price decreases--never realizing that they are being treated to de facto censorship, since only the publishers willing to kiss corporate butt would get their books stocked."

02-23-2007, 02:38 PM	#7
QueridaNegra Member Posts: 23 Karma: 10 Join Date: Oct 2006 Device: Sony Reader, Sony Reader!!	NOOOOOOOOO. I love Barnes and Noble (despite the fact that they don't stock Readers). Borders and I have had a tumultuous relationship at best. I don't want BN Borderized (and I HATE HATE HATE Border's website. If I wanted to go to Amazon.com, don't you think I would have typed that instead??)

02-24-2007, 03:17 PM	#12
Cthulhu Technologist Posts: 488 Karma: 585237 Join Date: Oct 2006 Location: I'm between Cities Device: SONY Reader PRS-500	I have never been a big fan of Barnes & Noble, and it started in college when I read an article that B&N owns a number of university bookstores. That right there was enough. In the article was a story, now hearsay since I cannot produce it, that B&N Uni. bookstores would brook no competition and would slash prices until it ran a rival out of business, then ramp the prices up once more. I concur that Borders' website should state "We find that synergy is great, and coupling with Amazon lowers our overhead, our prices, and our workload. So go there." The ridiculous "re-branded" website really irks me. So I have not been inside a B&N store since 1996. Every time I go to a Border's, I get all antsy; there's just too much, and I grow weary of not finding older titles, only the new literary hotness. Case in point: I was looking for a couple of books written by a Simpson's series writer. The one work available was out of print (I think it was five years old) and I could have it for the steal of a price $124.95. I am sure this rant has come up before, but why is it that I can purchase a huge pile of CD's that contain audiobooks, but not a single CD with an ebook, or better yet, why is there no cute display of SD cards with various and sundry titles on them? It seems to me that Publishing companies despise e-books and lament the day they ever allowed the format, and that large Bookstore chains share this disdain. I find it ludicrous that Border's sells the SONY Reader, but absolutely no content for it. If Border's and B&N merge, there will be little to distinguish between the change, save that pricely may very likely increase for most of the titles available, and smaller press books may be omitted. The only way most smaller, independent bookstores can survive these day is a dedication to a particular genre or niche. Anybody know of any really cool electronic bookstores that let you bring in coffee?

02-24-2007, 10:23 PM	#13
sea2stars Zealot Posts: 104 Karma: 64 Join Date: Dec 2006 Device: eb1150, Sony Reader	Any cool electronic bookstores that let me bring in coffee? Besides my living room with the laptop in it? I've always liked Borders more; probably because I worked at a B&N during and a few years after college. It was one of the first "superstores", even though it didn't have a cafe or sell music. It actually closed a few years ago; unable to compete with a larger B&N, Borders and Amazon. I was forced to wear a corporate yoke... er.. a tie, and envied the kids in their jeans and t-shirts over at Borders. sigh I sure miss the 40% discount during the holidays when I'd horde books wherever I could. If the two do merge there will certainly be a reduction in selection; if only for the simple reason that the two companies have a tendency to build their edifaces as close to each other as possible and stores will be closed. If Borders & Noble happens, I think they'll have even less of an incentive to sell ebooks. Both B&N and Borders reluctantly started online sales in the late 90's; I doubt they had much choice in the matter. I doubt they'll ever see ebooks as the same sort of competition that online sales created, and with one less kid on the block... shrug Eh. I'll stick to my favorite used book stores, online used books stores, my current ebook infatuation and Amazon.

02-25-2007, 11:20 AM	#15
sea2stars Zealot Posts: 104 Karma: 64 Join Date: Dec 2006 Device: eb1150, Sony Reader	I guess it comes down to the fact that it's the rest of the consumers out there, who are the ones making the decisions for us in the corporate world. Whatever sells the best is going to be carried the most in a store, and everything else will be slowly whittled down to the bare minimum. When I first started working at B&N I couldn't believe how many paperback books were "stripped" each year. A book being stripped when the cover is torn off, sent back to the publisher, and then "destroyed"/thrown out at the store. And we were a small store. I didn't realize that Mobi was acquired by Amazon.. then I looked it up to realize that it happened almost two years ago.

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