Borders sale fails

Grim record shop news from the US: Borders sale has failed; all 400 stores are now to close. Reuters reports:

The Hilco group will begin liquidations as early as Friday, with the process to conclude sometime in September, Borders said. The bookseller will seek bankruptcy court approval of the closing procedures at a hearing Thursday in U.S. bankruptcy court in Manhattan.

Andrew Glenn, an attorney for Borders, told Reuters last week the company expected a liquidation sale to bring in between $250 million and $284 million.

It had lost much of its sparkle over the last couple of years, but Borders was still shifting a lot of CDs.

Borders agrees a sale

The remaining Borders business in the US has agreed a sale to Najafi. They own the Book Of The Month club; the deal needs court approval and the company will liquidate if they don't get it.

Bookmarks - Internet stuff: Borders

Christopher Caldwell mourns Borders' demise in The FT [irritating registration required]. He focuses more on its core book business, but his analysis applies to the CD department, too:

The forces that crippled it are the same ones that killed Tower Records, with the lag accounted for by the surprising fact that music wound up being easier than literature to digitise to customers’ satisfaction. Borders’ rise was computer-based: it was the first bookstore to carry out the digital revolution in inventorying. It could display more books because its software kept precise track of what was selling and how fast. Live by the sword, die by the sword. Borders’ inventorying turned out to be relatively simple to duplicate. Walmart and Target, not to mention Amazon.com, were soon able to match and beat its prices. Tax policies that favoured virtual enterprises over physical ones hurt, too.

Closing Borders

Britain's Borders went months and months ago; earlier this week the Australian flavour closed down altogether, and in the US the company sought protective bankruptcy and announced the closure of a number of stores.

To be fair, when we read through the list of closures in Colorado, we were going "What? they had a store there? Why?" so there is an element of genuine consolidation possible here. Borders seem to have had a policy of opening branches in new malls but leaving branches operating in nearby, declining malls, which does leave a bit of room to take out some stores without the network collapsing. (The American mall market is different to the UK one, where HMV is hoping that people will travel five or six miles extra to the next High Steet store.) The 200 closures and Chapter 11 could bring $2billion back into play that otherwise would be spent on rent.

But what does the protective bankruptcy mean for the music industry? Billboard have some interesting figures which shows the size of the bath the majors might take:

The site also lists Borders' 30 largest creditors, beginning with Penguin Putnam, which is owed $41 million. The first music vendor to appear on the list is Sony Music at no. 14, which is owed $4.3 million. It is followed by Universal Music Group at no. 17 ($3.75 million), WEA at no 18 ($3.4 million) and EMI Music at no. 26 ($1.7 million).

Unpleasant sums, but not the sort of hit that would even take out EMI right now.

And even if the stores vanish, it's not going to be more than a final drying of a sales source that has been in decline for years:

The company, which only carries music in 500 of its stores, was once a significant force in music, but its SKU count has steadily declined as U.S. music sales dropped during the past decade. In 2000, when music sales was at its U.S. peak, the typical Borders store was carrying 50,000 titles, but that dropped to 29,000 by 2003, 14,000 in 2006, and 9,500 by 2009

The real worry for the music industry seems to be not so much what they'd lose directly if Borders close, but what the knock-on effect might be:

If Borders pulls out of music or the chain goes away, the question of whether Barnes & Noble will continue to stay in music looms large as a future worry, according to executives.

This seems to be a tacit admission that both chains are only using CDs as a loss leader, doesn't it?

Borders: Trading as normal with closing down sales

It might just be me, but if an administrator is "trading as normal", wouldn't that make a closing down sale at Borders a little soon?

Unless, of course, the claims of 'still searching for buyers' are little more than sops to try and keep the staff turning up during the wind-down period. After all, you can't hold a closing down sale unless you're actually closing down. Perhaps administrators MCR should call it a giving-up sale.

Brighton already treating Borders like a dead man walking

Panic in the centre of Brighton as they watch Borders struggle for life:

A prime shopping site could lay empty for months following the collapse of bookshop Borders.

This despite the chain (currently) still being a going concern. But the worry - which seems to come solely from the Evening Argus looking to fill a square on its pages - hasn't been helped by Churchill Square's failure to fill the slot left by Zavvi. Ah, if the Virgin Megastore had remained in its gorgeous building along Western Road, the hole might have been less apparent.

Borders on the edge

Things keep getting glummer and glummer for the UK branches of Borders - the prospect of being rescued by WH Smiths was bad; the withdrawal of that prospect was worse; now, the 45 remaining stores have been placed into administration.

The administrators are sounding upbeat about finding buyers, but... I'm not sure the prospects are looking that good.

Shrinking Borders

Bad news from Borders, with the UK version of the CD and book store announcing store closures:

Borders announced yesterday that leases for five stores, Blanchardstown in Dublin, Llantrisant, London Colney, Oxford Street, and Swindon have been sold to the fashion retailer, New Look. It is unclear when the stores will finally close or how many staff will be affected.

It's possibly a sign that Borders is planning to concentrate on its out-of-town locations by freeing up town centre leases that have other potential takers. Or possibly the first shutterings of a long, slow decline.

Borders invites offers

The UK leg of Borders was thrown off by the parent chain last year; now, they're looking for a buyer for the US stores, too.

This almost doesn't quite concern us as a music blog, though, as last month the chain unveiled its new-look stores, which have replaced the CD section with a digital kiosk. Although judging by the CD section in the DC store round the back of the White House, even the ones which do still flog CDs don't do so with very much enthusiasm.