From CNBC.com:
By DAVID RUNK updated 1:48 p.m. PT, Thurs., March. 20, 2008
DETROIT – Borders could become the latest victim of the credit squeeze, announcing Thursday that it may put itself up for sale. Rival Barnes & Noble, meanwhile, saw fourth-quarter profits drop 9 percent as the industry struggles with intense competition from discounters.
Shares in Borders tumbled more than 39 percent as the nation’s second-largest bookseller said it was considering options including the sale of the company or certain divisions, and that it had lined up $42.5 million in financing to help it keep running through the year.
“It’s a crunch of three C’s_ credit, capital and consumer spending,” said Dan Ansell, a partner at Greenberg Traurig LLP and chairman of its real estate operations division.
Despite its earnings slide, Barnes & Noble boosted its dividends and surprised Wall Street with predictions of a profitable first quarter. Analysts said the nation’s largest book seller would be the most likely suitor for Borders.
Both big bookstore chains have deepened discounts for their members, as shoppers are even more focused on low prices for discretionary items as they pay higher gas and food costs.
But analyst Michael Norris at market research firm Simba Information said customers are increasingly turning to wholesale clubs and other discounters like Target Corp. and Wal-Mart Stores Inc. for books and other merchandise.
“This is going to be a really tough year” for booksellers, Norris said.
Stacy had originally posted this on her blog, and since I still can’t comment there, I’m posting it here instead.
Which do you do more of?
Do you shop at Borders, or the other place instead?
I have to wonder how much eBook sales are affecting the decline in sales at major book stores. Personally, I buy 90% of my books in eFormat, because my only other option is Wal-Mart (as I’ve mentioned before, I’m an hour away from a Borders/Barnes) and not only is their selection limited, but I’m somewhat morally opposed to buying all my books from there.
If I’m in the area, or out shopping with friends, my preferred chain is Borders. I think the ambiance is better, and the customer service is far better than that of my Barnes.
Regardless, I think online ordering and eBook sales are having the biggest impact. I think Borders would do better to start offering eBook sales through their website (no idea if this is even possible, or it’s already in the works) or, even better, books through their website. They’ve partnered with Amazon to order books online, but unlike Barnes, they don’t offer sales/shipping direct through their site.
Thoughts?
I tend to shop at Borders or Amazon. And mainly at Amazon simply due to discounts and free shipping. IDK I guess it’s just easier but I do look at bookstores. The problems is I dont’ remember the last time I bought a book from a book store?
I would miss a borders or B&N but tend to avoid them when I know I can’t spend. (If I stop, I’ll buy.)
But really, I buy mostly online- for convenience.
Ebooks? I can’t really see that being an issue. Partly because I don’t know anyone besides my online friends who buy them … and even that is a percentage … and because I don’t buy them. You can see it because you DO buy them. See?
That makes perfect sense, Zeek. I guess I didn’t really think about it like that.
How about them making their books available for online order, then?
I love my Borders!!
They have yummy frozen coffee drinks also.
Yeah, but I’ve been to your “other” place and it’s nice! like, really nice. Mine isn’t..and plus, the customer service there sucks. LOL
Man, I shop more at the other place, don’t stone me, my friend Lexi works there!
You mention eBooks and Wal Mart, but I wonder how much UBS are biting into Borders and B&N. I’ve almost given up on romance and vow to only get them used, unless it’s an author I can trust such as Loretta Chase or Jo Beverley.
I use Borders because of their coupons and try very hard to buy only when I have a coupon. Having the coupon makes the price equal to Wal Mart or Target.
I love Borders and buy 99% of my books there. Oftentimes I don’t have a specific book in mind, I’ll just go in and see what I can find. I think their layout is awesome, so so so much better than B&N. I hope they don’t sell!!!
I like the selection and ambiance better at Borders and I also have coupons from them so I almost never go to B&N. I do order a lot of my books online. It’s more convenient with a better selection & sometimes better prices. When I go to a UBS I try to buy books I wouldn’t buy otherwise, but that doesn’t always work! I think online ordering is probably the biggest problem for bookstores.