Chronicle of a death foretold
The 40-year-old Michigan-based bookstore chain filed for bankruptcy in February, all thanks to the success of online stores such as Amazon.com, reports Vivek Sinha.books Updated: Jul 31, 2011 01:04 IST
Nobody could feel the intensity of pain that online stores (read Amazon.com) can inflict on brick-and-mortar retailers than Borders — the Michigan-based bookstore chain. The 40-year old bookstore retailer that operates over 500 book stores across US, Australia, New Zealand and Singapore filed, on February 16, 2011 for bankruptcy under Chapter 11 of the Federal laws of the United States. Borders had to file for bankruptcy in the wake of years of declining sales that were mostly due to intense competition from online booksellers and the growing e-book market, an area where Borders was late to get into.
“It has become increasingly clear that in light of the environment of curtailed customer spending, our ongoing discussions with publishers and other vendor related parties, and the company’s lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor has filed a petition for reorganization relief under Chapter 11 of the Bankruptcy Code,” said Mike Edwards, Borders Group President. The closure may not mean an immediate end to brick-and-mortar bookstore across the world, yet it does indicate a significant shift in the book business paradigm.
While Internet has helped create lakhs of jobs in this case it has rendered thousands jobless. The reported sign spotted on the locked bathroom of a Borders store directing customers to Amazon.com’s facilities says a lot in few words.