Les frontières (document en anglais)

Borders changed the way books were sold and became the largest book retailer in the world. At one time, it had more than 1,300 large stores and approximately 35,000 employees. But, in February 2011, Borders declared bankruptcy.

When it did so, it had shrunk to 674 stores and about 19,500 employees. Borders experi- enced hard times and paid for the ineffective strategies employed by its executive leader- ship teams. At its peak in the 1990s, Borders stock sold for more than $35 per share. On the day it declared bankruptcy, Borders stock sold for 23 cents per share.

What went wrong? Many goods are now sold by large chain store retailers. However, the way people buy and what they buy is beginning to change—especially in retail sales of books. Since 1995 and the founding of Amazon.com, books have been sold over the Internet. But with the rise of digital technology, electronic books

and devices to read them have become highly

popular. Quite obviously, they do not require large

“brick-and-mortar” stores to sell them. Borders

simply did not adjust quickly or effectively to

these changes in the marketplace. Of course, it

had to compete against Barnes & Noble, Walmart,

Costco, and other large retailers selling books. It

did not adjust quickly to Amazon’s appearance in

the market. It was much slower than Barnes &

Noble, and that company required almost two

years to launch Barnesandnoble.com. One of

Borders’ early mistakes was to develop an agree-

ment with Amazon to handle its Internet sales

instead of establishing its own Web presence.

Learn more about Barnes & Noble’s web-based retailing.

www.cengagebrain .com

Web-based retailing is growing in popularity, especially for electronic books. With eRead-

ers such as Amazon’s Kindle, Barnes & Noble’s NOOK, and Apple’s highly versatile iPad, the

old way of selling books is rapidly becoming a dinosaur. While these changes were occurring in the retail book market, Borders invested heavily to enhance the marketing for traditional book selling. Borders tried to lure customers to its stores with promises of an enriching experience. Borders was also harmed by chaos in its execu- tive ranks, having three regular CEOs and an interim CEO within a period of about two years. As a result of poor strategic decisions and inef- fective strategic leadership, Borders suffered net losses of $344 million for 2008 and 2009. It also had compiled a massive debt in a campaign to buy back its stock while trying to keep the price high. All of its actions had the opposite effect.

With the bankruptcy, Borders wants to stay

in business if it can reach agreement with its

debtors. It plans to close about 200 more stores, and obtain

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