The news of Border’s filing for Chapter 11 bankruptcy is has been around for a couple of weeks. In fact, they already filed for bankruptcy in the UK late last year.
Even though the filing was just for protection, it makes you wonder how they got in a situation, like this. Where did Borders go wrong?
Not Paying Close Enough Attention to Trends
The biggest, most talked about trend in the publishing industry last year was the development of eBook readers that didn’t suck. Whether it was the Amazon Kindle or the Barnes & Noble Nook, eBook readers were everywhere. And so were online eBook stores.
Even with the growing popularity of eBooks and eBook readers, Borders tried to expand their paper book sales. Their eBook strategy was almost nonexistent until the later part of 2010. This was nearly 2 years after Amazon made a name for themselves as one of the largest eBook store.
Big Executive Turnover
Borders went through 4 CEOs in 5 years.For many, this would strike major concern for their choice in leadership. If you’re not able to find a good leader that will stay for the long run, how can you expect to fix your company. Hopefully their current CEO, Michael Edwards, will do good with the company financials and actually stay long enough to see Borders come out of it’s current predicament. That is, if they ever do come out of it.
Out of Touch With Customer’s Needs
Why is it that one of the biggest sections in a Borders store is the DVDs and CDs. Last time I checked, not many people buy an actual CD or DVD any more. People in this day and age prefer to download music and rent movies from Redbox or Netflix. Their just isn’t a big market anymore for these types of products. Instead, Borders can use the money that would have gone to the extra space for bandaging their debts of around $1 billion dollars.