I resisted commenting on the $8.3 million of insane bonuses Borders is offering its top execs, but now that Borders has reached a new low and are having a meeting with skeptical publishers this morning to try and convince them that their reorg plan is viable, I think it’s time to really diss on this debacle.
According to PW:
Publishers are unhappy over the size of the executive bonuses, worried about Borders’ plans for returns, and annoyed that the chain appears to have overstated how well they are doing by combining going-out-of business sales with sales from ongoing stores. None of the major publishers has yet to resume shipping to the chain on normal terms, although a number are shipping the chain on a cash basis. Borders is eager to return doing business on regular terms.
The details of the reorganization plan are confidential, but according to the Wall Street Journal, part of the reorganization will include a move out of Ann Arbor and greater reliance on e-book sales.
First off, the bonus thing is bullshit and smacks of all the b-school rhetoric about compensation incentives. “Get us out of Chapter 11 and we’ll make you RICH!” Since 1999, no book person has been CEO at Borders. Instead, they started raiding Jewel-Osco for execs with grocery store experience. Which worked out . . . well, what’s the antonym of “awesome”?
But now, somehow, someway, I feel sure that Borders will work its way out of bankruptcy, pay off these newcomers, and then go totally bust 6 months after they flee.
It’s not that I’m entirely cynical about corporations (yes I am. Especially after this), but look at the two named points of their strategy:
1) Get out of Ann Arbor;
2) Greater reliance on e-book sales.
Forget about the fact that, in some way, Borders morally owes Ann Arbor, but in what part of America will they find a more affordable place to have their headquarters? Downsizing is one thing, moving when you have no money just seems sort of dumb.
And e-books?!?!??!? When was the last time you even noticed that Borders has a website? Yep, never. Well, they do. And you can even buy a Motorola Xoom from there. And some affordable e-books that you can read on your Kobo. I feel like an ass kicking a chain that I used to work for1, but if Borders has even 0.001% of the ebook market, I’ll be amazed.
(Really doesn’t help that they have to post this on the ebook page: “If you have any concerns about Borders’ recent changes, please be assured that your eBook Library is perfectly safe. Access and add to it freely..” Also funny that the Borders ebook software has been “liked” by 2,740 people on Facebook. Open Letter is “liked” by 2,248.)
Anyway . . . yes, focus on that. By the time Borders is shipping back trainloads of unsold merchandise after finally running itself totally into the ground I’m sure they can get their market share up to 0.01%.
The upside of all this is that the indie stores I’ve been talking to seem to all be having up years . . . Especially those located near soon-to-close Borders Stores. I suspected that a majority of Borders shoppers (something about using the words “majority” and “Borders shoppers” in a sentence feels wrong) would have turned to ordering online, but it’s reassuring to see that there are still a lot of people out there who want to visit a physical bookstore. It’s a great opportunity to indies to show a new group of consumers all the benefits they add to a community.
UPDATE: As I was finishing this up, I came across this piece on a new part of the “Teacher Appreciation Days” at Borders:
It’s an expansion on the BORDERS – GET PUBLISHED program that Borders runs in cooperation with BookBrewer, a self publishing service. For a measly $75 a teacher can sell their eBook through the Borders eBook store as well as other major eBook retailers, and receive a complimentary paperback version of their book.
I’m thinking that Borders is SO focused on e-books and potential e-book revenue that they’re totally unaware of the outside world. I’ll let MediaBistro take it away and deliver the parting shot:
Note: aside from the complementary paperback, this deal can be found anywhere for free. Teachers can publish through Amazon, Smashwords, B&N, or Kobo at no cost to themselves. You really need to ask if the $75 fee is worth it.
On a related note, Borders seems to have gotten a little scatter-brained since the bankrupotcy. The press release mentions two e-reader that Borders no longer sells. One is the original Kobo, which was discontinued months ago.
Yes, I’m sure this reorganization will go smoothly . . .
1 Schuler Books & Music, which used to have one of the greatest staffs and fiction sections in all the U.S., is technically Borders Store #04. We used the Borders POS and Inventory system, Borders sent us stock that we would always have to supplement/replace with “real” books, etc. I’m thinking that this arrangement is going to have to change, since Schuler has been expanding, whereas . . .
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