NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's uplifting perspective on world, national, and local politics.

Monday, July 18th, 2011

Borders prepares to liquidate

Bor­ders, the sec­ond largest book­store chain in the Unit­ed States, will soon be going out of busi­ness. The com­pa­ny announced today that it had run out of time to reor­ga­nize itself and would wind down its operations.

Bor­ders said in a news release that it will pro­ceed with a pro­pos­al by Hilco and the Gor­don Broth­ers Group. That liq­ui­da­tion plan will be pre­sent­ed to the fed­er­al judge over­see­ing the company’s bank­rupt­cy case on Thursday.

What is left to unwind are Bor­ders’ 399 stores, about two-thirds of the loca­tions it oper­at­ed when it filed for bank­rupt­cy in Feb­ru­ary. It cur­rent­ly has 10,700 employees.

Bor­ders will begin clos­ing  its remain­ing stores as soon as Fri­day, and the liq­ui­da­tion is expect­ed to run through September.

The com­pa­ny has ten stores around Puget Sound, includ­ing one in down­town Red­mond, NPI’s home­town, and anoth­er half-dozen stores in Ore­gon’s Willamette Val­ley. Two (in Fed­er­al Way and Taco­ma) were already in the process of clos­ing, and now it looks all the oth­ers will be gone in a mat­ter of weeks.

Bor­ders’ demise will result in the loss of more than ten thou­sand jobs.

Although the Inter­net will undoubt­ed­ly be cit­ed in many Bor­ders obit­u­ar­ies as the cause of its demise, the real­i­ty is that the chain was doomed by poor man­age­ment and ques­tion­able deci­sions. It did­n’t col­lapse overnight; it’s been ail­ing for years. Half a decade has now gone by since Bor­ders had a prof­itable quarter.

Bor­ders could have sur­vived, if it had closed under­per­form­ing stores ear­li­er, not out­sourced its online oper­a­tions to Ama­zon, and done a bet­ter job of antic­i­pat­ing and con­trol­ling costs. But, like Cir­cuit City and Block­buster, it did­n’t make the moves that it need­ed to in order to remain a going concern.

To put it more suc­cinct­ly, the rise of ecom­merce is not what killed Bor­ders. Missed oppor­tu­ni­ties are what killed Borders.

Written by Andrew Villeneuve :: 5:09 PM

Categories: Economic Security, Policy Topics, Views & Reviews

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