July 15, 2019 • 50 mins
Once upon a time, the Borders bookstore chain was the biggest story in the industry. But in 2011, the company would go out of business and that's all she wrote. We look at what happened.
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Episode Transcript
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Speaker 1 (00:04):
Business of the Brink is a production of I Heart
Radio and How Stuff Works. It's like something out of
a book of fairy tales. What began as a used
bookstore flourished into a nationwide chain of huge bookshops. They
were places where you could grab a coffee and a
(00:25):
good book at the same time. But when things went wrong,
they went really wrong, and we became a nation without borders.
The book start not you know, real borders. We still
have those. Hi. I'm Jonathan Strickland and I'm Ariel Casting,
and you're listening to Business on the Brain. Hey, Ariel,
(00:53):
Hey Jonathan. So for once I wrote the intro we did.
It was very funny. I didn't do as many puns.
I just did a really dumb joke. I like it.
I'm glad. I'm glad. So, yeah, we're gonna talk about borders.
But there's a reason we're specifically talking about this topic
because it was a request yes from Ashley. Hi, Ashley,
thank you for listening. Yes, Ashley asks why did borders
(01:16):
fail when Barnes and Noble did not? As an excellent question,
it is, And well we'll summarize that at the end.
We're gonna we're gonna talk about the journey Borders takes
to get there, to get there, because it's I mean,
Borders was, it was a company that defined the modern
bookstore in many ways. They were the trend setter. Yeah.
(01:38):
To the point, where have you ever seen the series
Black Books? That's that's a BBC series. I haven't, but
I have heard of it. Yeah. Dylan Moran plays a
very grouchy bookstore owner in England and at one point
one of those mega bookstore conglomerates moves in right next
door and it's it's essentially a Border's type of place,
(02:03):
and uh, and it really irritates him. Although everything irritates him.
It irritates him when customers come into a shop, it
irritates him when customers go into the next door shops. So,
but that's beside the point. We're going to talk about
Borders and not Black Books. Um. I do want to say, though,
I think it is horribly fitting that today our notes
on the topic are on paper. Yeah. Yeah, Also a
(02:25):
fun peek behind the curtain. We record this in the
evenings and at my studio at my office, And by mine,
I mean Hellsta works. It's not really mine. I just
worked there and the day we're recording this is the
same day that they're rebooting our network, so we had
to go with the paper. But it fits. It fits
for a bookstore, specifically for Borders. So you're gonna hear
(02:48):
some ambient sound effects that are just us turning pages.
Like yeah, yes, we'll have to do an s MR
Brink episode at some point. So one of you a
SMR artists, really needs to, like seriously bring gett of
the pack. We can do a whole episode on you.
So here's the thing this episode. It turns out that
we learned it's not as simple an answer as you
(03:10):
might imagine. I think most people would say that the
Internet was the reason why Borders went out of business,
and it was really just a small part of it. Yeah,
that was that was one factor that was definitely important.
I mean, yeah, it wasn't small, but it wasn't the
only thing. Yeah, So we're going to look at the
entire journey of Borders. Also, this is an interesting story
(03:34):
because we typically talk about companies that have a brink
moment where they either get launched into the stratosphere and
it goes from being a small operation into an enormous
one or the reverse, where a big company has a
series of misfortunes Lemony Snicket style and it plunges this
This bat Dealer's story has both. It does it does.
(03:56):
We're going to start with a h A little side
note here. Um, I love bookstores. I love going into
bookstores and perusing the books and looking at the book
covers and maybe looking at the back blurbs. Yeah. I
like the physical experience of having actual books to hold. Yes,
(04:22):
that being said, almost all the books I own now
are electronic. I I don't own any reader. I do
have a tablet and obviously my phone, but I I
much prefer I get much better retention of the content
I'm reading when I read it on paper. So most
of my books are hard copy. Yeah, dead Tree edition,
(04:43):
dead Tree Edition. I'll say a lot of those are
currently in the basement as we reorganize our house. But
I do still really enjoy just crack and open a
paper book. I'm about to go get another library card
just for that reason. Oh nice. Now, were you ever
the type of person who would go until I a
Borders or maybe a Barnes and Noble and just park
it on a wingback chair and read a book for
(05:05):
like six hours. No, No, neither was I. UM. I
would sit on a chair and like peruce the content
if it was something like an art book or novel
or a recipe book, just so I knew the contents
because it can vary so widely. Do you know if
I actually wanted to buy it, But no, I won't.
Even like I won't read magazines in the grocery line
(05:28):
check out, I won't. I won't read books. If I
want to sit down and read a book that I
don't want to buy again, I'll go to the library.
Same here, same here. Yeah. I remember going through very
important books just to make sure I wanted to buy them,
mostly dungeons and dragon source books. That is important. So
let's talk about the history of the Borders Store. It
(05:48):
was founded way back in nineteen seventy one by the
Borders brothers. The name comes from the brothers who founded
the store, Tom and Lewis Borders. Yes, and they we
l O U I s. So some of them are Lewis's,
some of them are Louise Luis Laois Borders Borders from
(06:11):
ann Arbor, Michigan. Yeah, and originally it was a used bookstore.
They didn't they didn't come out the gate with a
mega ya mega bookstore. These were two guys who were
still attending the university over at Ann Arbor and they,
you know, the University of Michigan. So they didn't have
(06:31):
a huge amount of money to just drop on a
on a bookstore. And it's funny because it kind of
came out of necessity because so Louis Borders comes to
do some postgraduate work at the University of Michigan. He's
studying mathematics, by the way, and he gets an apartment
and the previous inhabitant of that apartment who had left
(06:55):
left behind up apparently a bunch of books. So Louis
and Tom De said, well, I don't want to hold
on to these. I mean, but they could have poor
college students need things like furniture and just come together
and you get a two by four and you gotta
put it on top of that, and you got yourself
get yourself a dining room table. Yeah, but they decided
(07:16):
they would sell the books. But they had apparently so
much fun doing that that they thought, why not make
a business of this and actually make a used bookstore,
because being so close to the University of Michigan. They
knew that they could have a pretty healthy business just
catering to students, so they made that decision, and then
(07:38):
they opened up their first location. What their first location
was specifically is something that I actually had trouble tracking down.
There's a lot of conflicting information about which location was
in fact the very first location. I guess bookstore owners
are better at reading information than recording it. Yeah, that's
(07:59):
the nineteen and he's no one bothered to, you know,
to keep track of that. But the various addresses I've
seen are two eleven South State Street and three eleven
Maynard Street, which are two different addresses I looked in
Google Maps and everything, um, and so there's some disagreements
about which of those stores was first, but the Maynard
(08:19):
Street location was frequently cited as the company's flagship store,
so whichever one was their first one. They ended up
settling at another location at three oh three South State Street,
and all of these were an easy walking distance of
the campus of the University of Michigan. But this is
when they started selling new books. Yes, they decided to
(08:40):
switch from used to new, and I also decided to
go from a modest bookstore to a larger storefront, not
as big as what they would ultimately go with, but
you're talking about ten thousand square feet. That's pretty big
for a bookstore. It is it is a good, healthy bookstore. Yes,
they kind of got addicted to big books stores too, though,
(09:00):
didn't they, because they bought also bought a like an
old department store, Yeah, Jacobson's, which was a really old
chain up in the Michigan area, not something that we
would see down here in Atlanta, and another fairly big space,
so yeah, they got that one too, also still not
far from the campus. And that was one of the
(09:21):
ways that they were able to really differentiate themselves from
a lot of the other bookstores, which tended to be
those small storefront like shops you go in and you know,
they fact that they had so much spaceman that they
could end up having a larger inventory, like a greater
variety of books than what their competitors could have. So
(09:42):
you might walk into a little bookstore and have to
put a book on order, but at their bookstore, because
they had much more space, they could order a greater
variety of titles and have more there was a more
likely chance that the book you wanted was already installed,
and then this was a less calm and occurrence, so
it gave them a leg up. Now, later on people
(10:06):
would gravitate back to the as we get to the
millennial age, back to the smaller, more um niche feeling
bookstores for for big bookstores. But at this time, you know,
bigger was better. Yeah, yeah, And it was something that
again was really appealing to the population of ann Arbor
in particular, they were known as sort of a literary crowd.
(10:28):
And then Louis Borders put his degrees in mathematics and
his knowledge of computer science to work because he designed
a inventory management system and it was away a book
inventory system or b i S is what it ended
up being called, and it was a way for them
to track not just what was in stock, but what
(10:51):
was selling. And it got to a point where they
realized something that would later become a big deal for
big data, which is, if you look at information and
you look at it carefully, you can start to identify trends.
So they could look at book sales and start to
predict which books were going to become popular before it
(11:11):
actually became a trend, which meant that they could be
proactive and order more of those titles so that they
could meet the demand as it rose up, so they
could actually start to predict trends as they were developing.
And that's amazing, it is. I wouldn't I wouldn't initially think, hey,
guy with a degree in mathematics would be the best
person to run a bookstore. I would think his brother,
(11:33):
who's who is a teacher, would be. But apparently it
was a match made in heaven. They also did something
really smart, and they took this b I S and
they sold it to other bookstores as well. Right, So
it wasn't like they had no, this is our secret
saace and you can't have our secret solace. They said, no, no,
this is a very useful system. It will come in
(11:53):
handy and they that was another business. In fact, they
operated it as a spinoff business this for a while.
They sold it off I think in the nineties, but
they were still you know, and this is still in
the seventies too. That's that's an era where there's still babies. Yeah,
well they're giant giant babies. Yeah. Personal computers are not
(12:15):
really even a thing yet. If you're buying a computer,
you're buying a very expensive large machine, right, because this
is not this is not yet the era of the
Apple two or the IBM PC. This is just before that.
So yeah, they were using these larger systems in this
this custom made inventory system, and it was really going well.
(12:36):
I mean, I think they could have probably just moved
over to this b I S system, selling it to
other places, updating it to keep up with the times,
and been successful, but they didn't do that. They also
expanded their bookstores as well. They opened in other locations.
So they opened some in Michigan, but they also expanded
beyond Michigan. Uh. They opened up one in Indianapolis and
(12:58):
another one in an odd location considering that their home
base was in Michigan. Do you know where that is? Atlanta? Yeah,
it's right in our hometown, I mean in the Atlanta's
big So it's a good hub. And and believe it
or not, we know how to read. We do. In fact,
(13:18):
we're doing it right now. Yeah. So they opened up
a store in Atlanta. And the nice thing was that
this b I S system proved to be incredibly useful
in each of those locations, and it proved that if
you knew how to use the system, you could customize
that stores inventory for that particular population. It showed that
(13:39):
different populations wanted different books. So the books that were
being sold that we're doing really well in Atlanta might
not be the same ones that are doing well in Michigan.
But the system lets you predict which ones you need
to order, so they were always on top of things.
That's pretty cool. The next really cool thing in in
Borders history is when they did in their first superstore.
(14:01):
This is the one that you probably associate with Borders
when you think of Borders or Barnes and Nobles that
had the coffee shop in it. It was Giant Um
and they hired a professional to help them expand this business,
Robert d Romualdo. Robert d ra Mualdo. That's a heck
of a name, it is. I had to keep going
(14:23):
back and looking at it to remember how to spell it,
you know, I I when I look at de Romoaldo,
I'm convinced I'm not saying it correctly, but I will
keep trying. I probably won't say the same way twice.
And he helped them grow this superstore model and it
was very successful, and by nine he was the CEO
of the company, and he incorporated new things into their superstores.
(14:46):
Now they didn't just have all of the books ever,
and some coffee shops. They also had music and movies
and things like that. Yeah. I remember walking into these
big bookstores and seeing like the entire section set aside
for music and film and thinking that's odd for a
for a bookstore. I loved it. Well, I mean, yeah,
we will talk a little bit more about the music
(15:09):
and movies stuff a little later, because it's another one
of those factors. Yes, yes, but you know I loved
it at the time because I could go find the
book and then I could go find the VHS of
the movie version, yeah, of the bus, right, so you
can you can read The Princess Bride while you watch
The Princess Bride. That would be a sobering experience. They
don't exactly match up. Is pretty close though, I mean
(15:31):
Golding also wrote the screenplay. But in the early nine nineties,
at this point, Borders is doing well and starts to
head toward an initial public offering to go from being
a private company to a publicly traded company. So under
the proposed I P O, the company they had not
yet launched an I P O. But they were in
(15:51):
the preparation for it, and that that involves a lot
of work, a lot of very technical legal work, to
to set what the stock price should be, what you
think the opening price is going to be, how many
shares you plan to offer? That in turn tells you
how much you think your company is worth. Right, because
if you say we're going to open at twenty dollars
a share and it's going to be X number of shares,
(16:13):
then you multiply those two numbers together and say, oh,
so you think your company is worth blah blah blah.
It's like you're going on shark take, except for you're
already established. Yeah. So they had estimated that they were
going to have three point six million shares of stock,
and at the stock price they were looking at, uh,
that would have given the company of value of one
(16:33):
hundred ninety million dollars. Not too shabby. But they didn't
end up doing the I p Oh. Something else happened.
Another company swooped in. Yeah, of all things, Kmart swooped
in and they said, hey, we're going to buy borders.
They had already bought Walden Books, and they had bought
(16:56):
that back in the eighties. Yes, yes, and now they
wanted to buy Borders as well. They were hoping that uh,
merging these large bookstores would bring them a lot of
extra revenue. Yeah, they were looking at Walden Books, which
had a lot of like mall locations. That's where I
always remember Walden Books, not as a standalone but as
a mall bookstore, more of an express experience. Yeah, and
(17:19):
then you had Borders the larger bookstores. And then they
also owned a few bookstores that were connected to Walden
Books but were called Bassett Books. That was largely in
the Northeast. There are all books about dogs, yes, the
Bassett Hound Books. No, it was it was another chain
of a small chain, like a regional chain of large bookstores.
(17:40):
So yeah, that was kind of there. There um their
strategy moving forward. And and at that point Borders consisted
of twenty one bookstores. Yes, and in after Kmart bought them,
they became the Borders Walden Group. And things look pretty good.
But things we're about to change. Musical sting. Yeah, so
(18:07):
we'll explain how they're about to change in just a moment,
But first we're going to take a quick break. All right, now, Ariel,
you were saying things were about to change. What did
you mean by that? Well, I meant that things were
actually going to get a little bit worse than a
little bit better, and then pretty better and then a
(18:28):
lot worse. Okay, could you perhaps elaborate? Yes. So Kmart,
like we said, bought borders they expected to bring an
extra revenue, and it did. Under their their first year
under Kmart, they brought in about two d foot eight
million dollars profit. Nice. Yeah, And in ninety four they
(18:51):
reached one point five billion dollars in sales. That's also
pretty nice, but surprisingly not enough. So Kmar was struggling.
They were having some financial troubles and borders Walden was
not helping as much as they had hoped. So there's
there's some slight variation in reports. Some people say that
(19:14):
kmars like, uh, we're gonna we're gonna ditch these bookstores
and let them become their own thing, and some some
reports say that these bookstores are like, hey, we're gonna
become our own thing later. Yeah. Whether or not it
was a decision made internally from the book side of
things or internally from the Kmart side of things, the
(19:35):
result was the same. Kmart did spin off the Border's
Walden Group, although at that point it had become the
Borders Group. So Borders Group gets spun off into its
own company and gets put back on track for that
I p O that was so hoping for. They finally
get their public offering UM. Now right afterwards they bought
(19:59):
share that came it still had in them, so Kmart
had retained at ownership and then decided that or at
least the Borders Group folks decided to purchase that back
from their former parent company. Yes, and in seven they
had really good luck with their public offering. They ended
up closing at forty four eight cents of share. That's
(20:22):
that's a pretty healthy per share price. Yeah, it was
healthy enough that they did a two for one stock split. Yeah,
we talked about those in the past. It's where you
double the number of shares, but you have the value
per share and it helps it helps inspire liquidity, it
helps inspire smaller investors getting involved. Yes, and and all
(20:43):
of the success UM encourages them to expand into Europe
and Asia, So now they're starting to open international locations there.
Their first store was opened in Singapore and they opened
up forty more stores, so rapid expansion of this point,
and their plans were for an international superstore chain with
(21:04):
a thousand locations. Yeah, and at that point they had
just a little more than two hundred locations. So a
lot of people also point to this era as being
in retrospect a dangerous one for Borders in the fear
that they were trying to expand too quickly and too aggressively.
(21:25):
There are a lot of stories that talk about Borders
the company that was opening up stores like crazy in
the nineties, Like, there are a lot of stories about that. Yeah. However,
in two thousand's now at this time, Amazon's also become
becoming big. Yeah. This is a right around the time
where Amazon was. They hadn't yet become profitable, but they
(21:48):
were becoming more of a player in especially in the
I mean Amazon started in the book business. Yeah, they
were just a bookstore, and to be fair, they weren't profitable,
but they were bustling. Like from the get go, Amazon
had high, high traffic. Yes. Yeah, so while while it
wasn't yet the goliath of goliaths that Amazon is today,
(22:14):
it was, it was doing well enough where it could
survive the dot com crash that was on the horizon
and make it through the other side and actually start
to turn a profit. And de rom Nualdo knew he
could see that this was this could be a big threat,
and he decided that Borders needed to adapt to meet
(22:35):
this threat, and so they created Borders Online. Yeah, so
important step that he recognizes that the internet is going
to be a really pivotal thing for commerce in the future. However,
launching an online presence is sometimes more difficult than it sounds. Yeah,
(22:59):
it takes a while to get notice, it takes a
while to get traffic, it takes a while to become
muscle memory for your consumers, and it takes a while
just to work out the kinks so that you've created
an experience that people enjoy. Yeah, and so when they
launched this site, they had some initial losses and the
(23:19):
investors freaked out and they said, nope, we're shutting it down. Yeah,
we're gonna we're gonna remove this. It's a drain on
our attention and our money and our time, so we're
going to close it off. And I would say this
was their first really big mistake. Yeah, they gave up
too quickly. Yeah, because a lot of and we have
(23:41):
more into it later, but a lot of analysts say
that them committing to the market late was what really
contributed to Yeah, and it's interesting because they didn't really
commit to it late. They well, I guess you could
say they committed to it late, but they carefully they
(24:03):
attempted it earlier. Yeah, I was. I feel a lot
of sympathy for for Borders at this time because you're
talking about again. In hindsight, it's so easy to say, right,
because the Internet has become such an enormous powerhouse in commerce,
But in the late nineties, everyone was pretty sure the
(24:25):
Internet was going to be really important for commerce, but
no one knew how. Yeah, and so it's kind of
callous to dismiss a company for saying, all right, well,
this isn't working for us, because it wasn't working for
a lot of people. Only a few companies had really
started to hit on that that method that would make
(24:45):
online business work, and Amazon was one of them. Yeah.
But it also it also did another thing. So not
only did this the initial losses freak out the investors
and get Borders Online shut down, it also meant that
they were looking to replace de Romoaldo thank you. Yeah, yes, Um,
so they did. Yep. So he gets he gets the
(25:09):
boot and gets replaced, and is replaced by Philip Feffer,
who ends up transforming the company and leading it for
the next decade, right, just for a few months. But
he just leads it for a few months. I don't
know if he transformed the company at all. Reign he resigned.
Usually if you transfer, if you leave, if you resigned
after a few months, if you've done any transforming, it
(25:31):
is not the good guys. I mean, maybe he won
the lottery and like piece gays them out. So who
do they turn to when Feffer leaves? You know why
I'm asking you that, right, because it's a horrible name
to say, Jonathan, You're very mean. De Romoaldo he comes
back first. Yes, then you get the other names. See
now I said the hard one, Now you get the
(25:52):
easy one. Greg Joseph Owitz, thank you. Yeah, Joseph Owitz
comes in, So Di Romaldo steps back in temporarily. But
then Greg Joseph A. Witz comes in and becomes the
new CEO. And this is the transition from the nineties
into the two thousand. Yes, there there is one side
(26:12):
note before we get fully into the two thousands. Which
is border Spot a toy company called All Wound Up. Yeah,
I had never heard about this. I hadn't either. It's
another bad decision, I feel, because they didn't even look
at adding toys to their superstores until the later later
in the two thousands till two thousand ten. Yeah, and
(26:33):
so they sat on a company for a decade without
incorporating it into their their major brand. Yeah. And maybe
All Wound Up was doing fine on its own. I mean,
we did a whole episode about toys r US. We
know how toy companies weren't doing so great in the Yeah,
but it's it's a missed opportunity. Yeah, I agree. So
(26:56):
this is another one of those moments where people point
to and say this, this might be Yeah, okay, it
was bad that they didn't commit to e commerce early enough,
But then they point to this decision coming up that
they say, no, no, that was really what killed him.
And that was when they decided to make a deal
with Amazon to sell their books. Yeah, so all right, again,
(27:19):
I feel sympathy again in hindsight, saying, handing the keys
to your car to a to a person who's dressed
in a shirt that's got black and white stripes and
they're wearing a mask and they have a ball and
chain hooked up to one ft. Maybe that wasn't the
best idea, Like, hey, that guy just stole my car,
(27:41):
that's what That's the way a lot of people paint
this is. Like, so Amazon's and online bookseller borders ends
up handing over their online business to their their online competitor. Yeah,
they decided to outsource their online sales. Yeah, But on
the flip side, like we were saying earlier, establishing a
web presence is tricky, even today when people think that
(28:05):
they have a real good handle on how online works, right,
I've seen it. I've been in companies that have been
a part of that where a big company comes in
and rather than developing their own platform, which is hard
to do, like for the same reasons we were talking
about earlier, they'll go and they'll look for another company
to either purchase that company and just have them handle
(28:28):
that part of it. Like it might be a smaller
company that already does online stuff and say, well just
buy them and they'll be our online presence, or they'll
contract it out. Like I get it, because if your
business isn't already natively the Internet. You have to learn
all of that in order to operate in that space,
(28:49):
and that's a lot to learn, and it could be
very different from the business that you typically handle. And
also you look at some businesses when they try to
diversify what they do too much, it causes fairly or
they stretched themselves too thin. So maybe keeping those resources
to what is really your your core competencies as we
would say in the old consulting days that I I
(29:12):
don't talk about very much. But yeah, yeah, so I
feel sympathy for this, but I also admit, Yeah, this
ended up being a pretty big miss. Borders had a
lot of pride in their name, in their brand, and
this really deluded it. Yeah, I think there was still
a belief at this point that the real world experience
(29:36):
of walking into a bookstore could have enough of a
draw on its own that they weren't going to cannibalize
they're in store sales by partnering with Amazon. As it
turns out, that was a hope based on dreams. Also,
around this time, they their investors were not very happy
(30:00):
with how management was working. Obviously, they had a CEO
resigned after just a few months. Yeah, that that doesn't
look good. They hired those investors, hired Merrill Lynch to
look at how to move the company forward, how to
make sure it was profitable and being managed correctly. They
looked at recapitalization, They looked at a leverage buy out.
They looked at having a company acquire them, or acquiring
(30:22):
another company and doing a merger um and they decided
to stay independent. At the time, so Borders wasn't it
was coming and going. They weren't always meeting their projections,
but they were still they were they were money, Yeah
they weren't. It wasn't like hitting that long decline yet. Yeah. Yeah.
So then two thousand four they hire a new chief
marketing officer named Michael tam in order to rebrand and
(30:44):
too really to position the stores as being like the
center of a community experience, like that idea that it's
separate from something you would get online. You can go
and separate from something you could get in a small bookstore.
So you could go, you could eat your lunch, you
could have a feet, you could read a book. You
need a muffin the size of a child's head, Yes,
those are the best muffins. Childhead sized muffins. Yeah, marketing
(31:09):
them is a little tricky, but they are tasty, yes, So,
so they focus on the community. They do some brand repositioning,
They acquire a company here too, They make some Walden books,
some Borders expresses. Uh. They make a deal with Starbucks
so they can sell Seattle's Best Ye in their bookstore.
(31:31):
This triage looked like it was successful. Um. In two
thou five, they posted profits of a hundred and one
million dollars and they launched their Borders rewards program. Yeah yeah,
which I was a part of back in the day. Uh.
And in two thousand six, Josepha Witz announces that he's
going to retire, and well, they've already chosen his successor,
(31:55):
a guy named George Jones. And they do something that
we have always stressed as being a very important thing
in any kind of corporate structure, which is having a
solid transition plan so you can have that transition not
just of power, but of knowledge. Yeah. When JOSEPHO Witz
said that he was retiring, he said, I'm planning to
retire in about two years. So they didn't wait for
(32:16):
the end of those two years to bring Jones on. Yeah,
which a good idea. Yeah. Also at this time, Pershing
Square invests in the company for an eleven percent stake.
But not all good news, because while this year would
be a good one for them, it would also be
their last good year. Yeah, it's the last time that
they would turn a profit. Jones comes on border stock plummets, yes,
(32:42):
to twelve dollars and twenty eight cents of share. Oh
that's a big drop. Yeah, that was a serious fall
from grace. So they quickly react by selling off some
of their subsidiaries. And I like in your notes here
because I couldn't help but make a snarky joke based
on it, so aerial. Don't they get rid of England
and Ireland and the rest of the UK? So I
(33:04):
wanted to reassure my listeners out there, England, Ireland and
the UK are still their borders. Just got rid of
their subsidiaries in these countries. Yes, they lost around a
hundred and fifty seven point four million dollars, but this
isn't about about like, here's as bad as it ever got.
We're now at the brink of true disaster, which we
(33:27):
will get into in greater detail in just a moment.
After this break. We left off with the shares dropping
down to twelve dollars and twenty eight cents. And we
wish we could tell you that's as bad as it got,
but it just got worse. Yeah. In two thousand eight
(33:47):
they went down another to just five dollars and seven
cents of share. Yeah, and it's still not as bad
as it would get, but I can't bring myself to
get there that quickly. So at this point they take
a loan from Pershing Square, who's already an investor. Yeah,
they had taken that eleven percent steak earlier. Yes, And
they take four two point five million dollars, and then
(34:11):
they put themselves up for sale. Yeah, they might have
even entertained. In fact, I'm sure they would have entertained
and offer from their arch nemesis, Barnes and Noble. Yeah,
Barnes and Noble was looking at if they wanted to
put in a bit, and they declined. Then they did
some more restructuring. They cut ties with Amazon, and they
made borders dot com. Yeah a little too little, too
late as an and then they cut a hundred and
(34:32):
fifty six jobs, which saved them a hundred million dollars. Yeah,
but they also sell off all their stores that are
over in the South Asia area, like in the Australia area. Yeah,
and then they lost more money. So by the end
of two thousand and eight, they had lost a hundred
and eighty seven million dollars and that was not great news,
(34:54):
great news. Great news for George Jones was terrible, terrible smell.
And George Jones got the boot. So he had come
into a pretty tough situation. It had gotten tougher, but
the Border Directors was not going to try and wait
and see if George Jones could turn things around, so
instead they replace him with a guy named Ron Marshall.
(35:16):
Ron Marshall, I feel bad for him. He didn't come
into at a bad time. He came in at a
worst time, the worst time because was the company doing badly.
Pretty soon, all of North America and by extension, the
rest of the world was going to have a real
tough time. Yes, we were hitting the global financial crisis
and a great recession, and so Border starts closing their
(35:38):
wild and books. I get it, because you know that's
not their flesh and blood. That's just yeah, this is
too anecdotal. I don't go to malls anymore. The few
times when I go to malls, I definitely don't see
the type of stores that were around when I was.
When I did go to malls, I mean I do
shoe stores, shoe stores, Claire's. If I want to get
if I want to get stuff pierced by a gun,
(36:01):
game stop Malls. Yes, just stands listen. I I do
go to malls, and and there's a lot of clothing
stores and some food stores, and a couple of electronic
stores as usually either an Apple or Microsoft. I'm getting
off topic. I really just want to go shopping at
this moment. Well, let's get back onto onto the track here. Yeah,
there's there's a few there's a few little book stores,
(36:23):
but they're more like calendars and games. Yeah. So they
continue trying to to cut huge amounts of costs. They
end up closing two hundred stores. They lay off another
fire people. They had gone from having more than a
thousand stores at their peak to fewer than two hundred.
(36:47):
So you know that the arrow we talked about where
they were really focusing on expansion, they're back now below
where they were at that point. Yeah, and now they're
also fighting e books. The rising popularity of e books,
which means that their two thousand nine holiday sales were
not great. They dropped thirteen from their norm. Yeah. This
would have been also the era where all the bookstores
(37:09):
were trying to come out with their own branded, proprietary
e readers. That was that was rough times too. It
was just after a year Marshall gets kicked out. Didn't
last very long at all. Yeah, Mike Edwards comes in
as interim CEO. More layoffs occurred, They pay back some
(37:29):
of their loan and they restructure the rest. So that's
that's a good step. Maybe things are looking up. Then
they get their more permanent CEO been at Le Beau
or Labao, and Edwards moves to being CEO of their
subsidiary branches. And that was after Bennett had invested about
twenty five million dollars in the company. And so then
(37:51):
they say, all right, what can we do to address this?
Beyond closing locations, they decided to try and update their yes.
So they do things like start selling e readers, but
instead of having their own one brand of e reader
like the Barnes and Noble Nook, they still six different kinds. Yeah,
(38:12):
this was where we started getting into that brand confusion stuff.
And by then, but then the Nook in the like
the Kindle, the Kindle was really the ruler of the
roots because Amazon had really positioned the Kindle for success
and would continue to do so. As Amazon would unveil
new programs like the Prime Membership, they would throw in
(38:34):
incentives like, you know, a discount on a Kindle reader.
And so Amazon was absolutely determined to dominate that space
and they that's what they did. And Barnes and Nobles
did all right, because Barnes and Nobles jumped on it immediately.
Borders was a little late to the game once again.
They launched an e library, which Barnes and Nobles also did,
(38:54):
but Barnes and Nobles did it eight months earlier. Yeah,
so their Borders is running a year late on all
of this technology. Um, they sell off their paper Chase acquisition.
They had bought paper Chase a while ago, and they
lay off more workers. Yep. They end up losing more
than forty six million dollars by that second quarter. So
they say, all right, well, let's keep on trying to
(39:15):
fix this. Uh. They start trying to put those toys
and games in their stores. Like we had mentioned earlier,
they launch a new website. They make another attempt at saying, Hey,
Barnes and Noble, how about maybe now pretty please, like
we look real, real cute. Yeah, And and Pershing Square,
who was owned by Bill Ackman, who was kind of
(39:35):
helping trying to help Borders really succeed, offers to help
finance the merger between Barnes and Nobles and Borders. But
still no dice. So yeah, by the end of it's
getting to the point where it's impossible to deny inevitability.
They are looking at the very real possibility of going
(39:57):
out of business. They had lost another seventy four million
dollars in the first quarter of ten. They delayed vendor payments.
They started to try and figure out if they could
maybe make a deal where they wouldn't have to pay
cash upfront for the book stock. They would only have
to you know. It's it's kind of like when Nintendo
(40:17):
offered to the same thing. Yeah, they said, we'll provide
all the stock, you don't have to pay us, just
pay us if you sell the console. That's kind of
what Borders was doing, except on the other side of
publish just publish. Just don't like that very much. No,
No publishers like it when you buy their books. They're
so great about like, no, I'll give you a whole
bunch for free, and then you just pay me if
(40:38):
you happen to move them. They're like, look, you guys,
it looks like you might be looking at bankruptcy. We
don't want your debt. Yeah. They kept on trying, but
it just wasn't really moving anywhere, and by February, the
New York Stock Exchange pretty much put the nail in
the coffin because the stock exchange there there are rules
(41:02):
were being listed on the New York Stock Exchange. You
have to meet certain criteria, including a certain share price,
or else the stock market will delist you. And I
think it's like a dollar. I think a dollar is
that minimum. And they were in ninety cents to share. Yeah,
so they got for a while. It wasn't like they
hit ninety cents in New York Stock Exchange said you're out. Yeah,
(41:23):
so they tried to go into chapter eleven. They said
that they had one point to seven billion dollars in
assets and one point to nine billion dollars in debt. Yeah,
they had some investors lined up and they eventually backed out.
So they were Originally when they went into when they
went into file for Chapter eleven, they were hoping to
(41:45):
be out of bankruptcy by September. They had some bids,
a bunch of like I said, they all kind of
backed out. It all fell through. They had a buyer,
Najafi was looking to buy them, but the Borders creditors
didn't like that. Yeah, they were afraid that Najaffee was
just going to come in liquidate all the assets and
(42:05):
then sell them off and then the debt would be
left with whomever the you know, was still around, And
they said, no, we don't want to do that. The
creditors are like, well, we feel like he's kind of
a shark. We'll kind of we'll do this, but we
have to pick who the liquidators are if they liquidate.
And and it was just this big ordeal between the
Jaffee and the creditors and the publishers and they couldn't
(42:27):
come to an agreement, and so the Jaffee pulled out
as well. Yeah, so then it ends up having to
go to liquidation anyway, It ends up going up for
auction and goes into the company goes into Chapter seven bankruptcy.
So Borders liquidates their stores. Most of them are liquidated
(42:47):
by July, includes all the Walden books as well, and
the books you know, the book Kiosks when it went
into chapter seven. At that point had been the second
largest bookstore chain, just behind Barnes and Noble. It's so
sad because I don't think Barnes and Noble would be
what it is if it hadn't been for Borders. Uh.
(43:08):
And then now Barnes and Noble actually owns intellectual property
of Borders. They spent thirteen point nine million dollars for
it to have the intellectual property, So let's answer that question. Though.
Why did Barnes and Noble survive but Borders didn't. I
think it was late adoption to the trends. I mean
(43:32):
that that's really what it is. Are there are some
other things, so they were late to commit to. Yeah,
they were late to jump on the on the e
book train. They they invested in CDs and DVDs at
a time when people were looking at digital media the books,
just as the population was starting to migrate from physical
(43:57):
media to digital media where they were downloading stuff instead
of just buying the hard copy stuff. And then my
assumption is they also weren't bringing things into their store
that people couldn't download, like the toys, like the games,
things like that. Also, some analysts say that expanding internationally
pulled them too thin as well, but I think that's
probably a smaller piece of the puzzle because one of
(44:18):
the fun facts I have later on a combination of things, again,
like the super aggressive stance on opening more locations probably
was over extending their reach a little bit. And then
as you say, these late adoptions of these very critical
technologies would end up haunting them so well, and CEO
turnover didn't Oh sure, Yeah, that was another thing, right
(44:41):
where you you put someone new in charge and if
things don't immediately get better, saying let's change it out again.
Like sometimes that's necessary. Sometimes you put someone in charge
and it becomes very clear, like we made a terrible decision.
But in other cases factors that have nothing to do
with the leadership. It could be external factors that the
(45:02):
leadership is dealing with and maybe maybe things would have
been worse without that leader in place. Yeah, And I
mean so when you see one CEO go out quickly
one or two, that's understandable. Once once you get a
rash of the CEO cycling in and out then just
freaking out. Yeah, exactly. The board directors doesn't have any
(45:22):
confidence in the company, and that in turn trickles down,
like the morale problem goes throughout the entire organization at
that point. So yeah, this was this was a case
of like a lot of bad factors all hitting at
the same time. That being said, while we have these
(45:42):
terrible stories to tell, we also have fun facts. Yes,
we arial likes to put these at the end of
every episode. I did a couple of them for this one.
One of the fun facts I have is that one
of the first Borders locations is now a restaurant and
craft beer pub called hop Cat. Don't know if the
original store not, but you can apparently get one of
(46:03):
up to a hundred different beers on tap there. I'm
going to imagine that the bar is built up on
old Borders books. Yeah, and then Louis Borders was also
responsible for founding another famous company that lasted only a
short while. In fact, is a company that is largely
associated with the dot com crash, and that would be
(46:25):
web Van. Web Van is one of the most notable
failures during the dot com days. It lost nearly a
billion dollars of investment when the company failed. I think
that investors had put in eight hundred fifty million dollars
into that company, and it was one of the ones
that went belly up shortly after the market crashed in
the dot com bubble burst. Yeah. He also founded another
(46:49):
company called people Media dot com. That was a company
that would archive magazine articles and it would allow people
to access them on a subscription basis. So it was
behind a paywall. Right. You would the idea being, oh,
I want to get access to this old article that
was published in say, Popular Mechanics back in nineteen sixty three,
and so you would pay a subscription. Uh. The name
(47:10):
of the company changed to my wire dot com. But
it didn't result in a successful business model. So I
don't know exactly when it went out of business. I
couldn't find any information on that, but I will tell
you that if you try to navigate to my wire
dot com now you'll get like kind of just a
bunch of generic links. It's not even it's clearly not
(47:32):
the same thing. I guess, Uh, I guess for Louis,
it was really one and done. Yeah, at least as
of two thousand fifteen, there were still international Borders. Not
again not. There's a lot of international Borders that way,
like Borders bookstores, including in Malaysia. Um so some of
(47:52):
those sold off forgot bought by other companies prior to
Borders going under and they still exist. Yeah, the first
Borders location stayed open all the way to the end,
all the way to the end, which is a pretty
good benchmark. Yeah, I'm sure there was a sad ceremony
held at the University of Michigan campus and the last
(48:13):
one closed. And I love your your final fun fact here. Yes,
it's in all of my research. I came across an
article on the Washington Post from May, if you want
to look it up, on what you can still do
with old Borders gift cards. I mean, because you might
come across like you might find one stuffed in a
(48:34):
soft shore one day. Among the suggestions suggestions were ninja
stars and gifting them to people you don't like. I
like that second one a lot, figured you might well.
That wraps up this episode. We want to thank Ashley
again for writing in and suggesting these. The next few
episodes will be recording are going to all be from
(48:57):
Listener requests. So maybe some of you out there are
thinking about a company you would love to have us cover.
Maybe there's a story about an amazing ascension or a
terrible fall, and you want us to give our take
on it. If you want us to do that, writing
us is the best way to do it. Send us
an email. They can send us that email at feedback
(49:17):
at the Brink podcast dot show yep, and you can
visit our website that's the brank Podcast dot Show. You'll
find the archive of the elder episodes there and some
information about your beloved hosts. And speaking of those two
beloved hosts, I have been Jonathan Strickline and I have
been aerial casting, I'm going to go read a book.
(49:40):
Business on the Brink is a production of I Heart
Radio and How Stuff Works. For more podcasts for my
heart Radio, visit the I heart Radio app, Apple Podcasts,
or wherever you listen to your favorite shows,
Business of the Brink is a production of I Heart
Radio and How Stuff Works. It's like something out of
a book of fairy tales. What began as a used
bookstore flourished into a nationwide chain of huge bookshops. They
were places where you could grab a coffee and a
(00:25):
good book at the same time. But when things went wrong,
they went really wrong, and we became a nation without borders.
The book start not you know, real borders. We still
have those. Hi. I'm Jonathan Strickland and I'm Ariel Casting,
and you're listening to Business on the Brain. Hey, Ariel,
(00:53):
Hey Jonathan. So for once I wrote the intro we did.
It was very funny. I didn't do as many puns.
I just did a really dumb joke. I like it.
I'm glad. I'm glad. So, yeah, we're gonna talk about borders.
But there's a reason we're specifically talking about this topic
because it was a request yes from Ashley. Hi, Ashley,
thank you for listening. Yes, Ashley asks why did borders
(01:16):
fail when Barnes and Noble did not? As an excellent question,
it is, And well we'll summarize that at the end.
We're gonna we're gonna talk about the journey Borders takes
to get there, to get there, because it's I mean,
Borders was, it was a company that defined the modern
bookstore in many ways. They were the trend setter. Yeah.
(01:38):
To the point, where have you ever seen the series
Black Books? That's that's a BBC series. I haven't, but
I have heard of it. Yeah. Dylan Moran plays a
very grouchy bookstore owner in England and at one point
one of those mega bookstore conglomerates moves in right next
door and it's it's essentially a Border's type of place,
(02:03):
and uh, and it really irritates him. Although everything irritates him.
It irritates him when customers come into a shop, it
irritates him when customers go into the next door shops. So,
but that's beside the point. We're going to talk about
Borders and not Black Books. Um. I do want to say, though,
I think it is horribly fitting that today our notes
on the topic are on paper. Yeah. Yeah, Also a
(02:25):
fun peek behind the curtain. We record this in the
evenings and at my studio at my office, And by mine,
I mean Hellsta works. It's not really mine. I just
worked there and the day we're recording this is the
same day that they're rebooting our network, so we had
to go with the paper. But it fits. It fits
for a bookstore, specifically for Borders. So you're gonna hear
(02:48):
some ambient sound effects that are just us turning pages.
Like yeah, yes, we'll have to do an s MR
Brink episode at some point. So one of you a
SMR artists, really needs to, like seriously bring gett of
the pack. We can do a whole episode on you.
So here's the thing this episode. It turns out that
we learned it's not as simple an answer as you
(03:10):
might imagine. I think most people would say that the
Internet was the reason why Borders went out of business,
and it was really just a small part of it. Yeah,
that was that was one factor that was definitely important.
I mean, yeah, it wasn't small, but it wasn't the
only thing. Yeah, So we're going to look at the
entire journey of Borders. Also, this is an interesting story
(03:34):
because we typically talk about companies that have a brink
moment where they either get launched into the stratosphere and
it goes from being a small operation into an enormous
one or the reverse, where a big company has a
series of misfortunes Lemony Snicket style and it plunges this
This bat Dealer's story has both. It does it does.
(03:56):
We're going to start with a h A little side
note here. Um, I love bookstores. I love going into
bookstores and perusing the books and looking at the book
covers and maybe looking at the back blurbs. Yeah. I
like the physical experience of having actual books to hold. Yes,
(04:22):
that being said, almost all the books I own now
are electronic. I I don't own any reader. I do
have a tablet and obviously my phone, but I I
much prefer I get much better retention of the content
I'm reading when I read it on paper. So most
of my books are hard copy. Yeah, dead Tree edition,
(04:43):
dead Tree Edition. I'll say a lot of those are
currently in the basement as we reorganize our house. But
I do still really enjoy just crack and open a
paper book. I'm about to go get another library card
just for that reason. Oh nice. Now, were you ever
the type of person who would go until I a
Borders or maybe a Barnes and Noble and just park
it on a wingback chair and read a book for
(05:05):
like six hours. No, No, neither was I. UM. I
would sit on a chair and like peruce the content
if it was something like an art book or novel
or a recipe book, just so I knew the contents
because it can vary so widely. Do you know if
I actually wanted to buy it, But no, I won't.
Even like I won't read magazines in the grocery line
(05:28):
check out, I won't. I won't read books. If I
want to sit down and read a book that I
don't want to buy again, I'll go to the library.
Same here, same here. Yeah. I remember going through very
important books just to make sure I wanted to buy them,
mostly dungeons and dragon source books. That is important. So
let's talk about the history of the Borders Store. It
(05:48):
was founded way back in nineteen seventy one by the
Borders brothers. The name comes from the brothers who founded
the store, Tom and Lewis Borders. Yes, and they we
l O U I s. So some of them are Lewis's,
some of them are Louise Luis Laois Borders Borders from
(06:11):
ann Arbor, Michigan. Yeah, and originally it was a used bookstore.
They didn't they didn't come out the gate with a
mega ya mega bookstore. These were two guys who were
still attending the university over at Ann Arbor and they,
you know, the University of Michigan. So they didn't have
(06:31):
a huge amount of money to just drop on a
on a bookstore. And it's funny because it kind of
came out of necessity because so Louis Borders comes to
do some postgraduate work at the University of Michigan. He's
studying mathematics, by the way, and he gets an apartment
and the previous inhabitant of that apartment who had left
(06:55):
left behind up apparently a bunch of books. So Louis
and Tom De said, well, I don't want to hold
on to these. I mean, but they could have poor
college students need things like furniture and just come together
and you get a two by four and you gotta
put it on top of that, and you got yourself
get yourself a dining room table. Yeah, but they decided
(07:16):
they would sell the books. But they had apparently so
much fun doing that that they thought, why not make
a business of this and actually make a used bookstore,
because being so close to the University of Michigan. They
knew that they could have a pretty healthy business just
catering to students, so they made that decision, and then
(07:38):
they opened up their first location. What their first location
was specifically is something that I actually had trouble tracking down.
There's a lot of conflicting information about which location was
in fact the very first location. I guess bookstore owners
are better at reading information than recording it. Yeah, that's
(07:59):
the nineteen and he's no one bothered to, you know,
to keep track of that. But the various addresses I've
seen are two eleven South State Street and three eleven
Maynard Street, which are two different addresses I looked in
Google Maps and everything, um, and so there's some disagreements
about which of those stores was first, but the Maynard
(08:19):
Street location was frequently cited as the company's flagship store,
so whichever one was their first one. They ended up
settling at another location at three oh three South State Street,
and all of these were an easy walking distance of
the campus of the University of Michigan. But this is
when they started selling new books. Yes, they decided to
(08:40):
switch from used to new, and I also decided to
go from a modest bookstore to a larger storefront, not
as big as what they would ultimately go with, but
you're talking about ten thousand square feet. That's pretty big
for a bookstore. It is it is a good, healthy bookstore. Yes,
they kind of got addicted to big books stores too, though,
(09:00):
didn't they, because they bought also bought a like an
old department store, Yeah, Jacobson's, which was a really old
chain up in the Michigan area, not something that we
would see down here in Atlanta, and another fairly big space,
so yeah, they got that one too, also still not
far from the campus. And that was one of the
(09:21):
ways that they were able to really differentiate themselves from
a lot of the other bookstores, which tended to be
those small storefront like shops you go in and you know,
they fact that they had so much spaceman that they
could end up having a larger inventory, like a greater
variety of books than what their competitors could have. So
(09:42):
you might walk into a little bookstore and have to
put a book on order, but at their bookstore, because
they had much more space, they could order a greater
variety of titles and have more there was a more
likely chance that the book you wanted was already installed,
and then this was a less calm and occurrence, so
it gave them a leg up. Now, later on people
(10:06):
would gravitate back to the as we get to the
millennial age, back to the smaller, more um niche feeling
bookstores for for big bookstores. But at this time, you know,
bigger was better. Yeah, yeah, And it was something that
again was really appealing to the population of ann Arbor
in particular, they were known as sort of a literary crowd.
(10:28):
And then Louis Borders put his degrees in mathematics and
his knowledge of computer science to work because he designed
a inventory management system and it was away a book
inventory system or b i S is what it ended
up being called, and it was a way for them
to track not just what was in stock, but what
(10:51):
was selling. And it got to a point where they
realized something that would later become a big deal for
big data, which is, if you look at information and
you look at it carefully, you can start to identify trends.
So they could look at book sales and start to
predict which books were going to become popular before it
(11:11):
actually became a trend, which meant that they could be
proactive and order more of those titles so that they
could meet the demand as it rose up, so they
could actually start to predict trends as they were developing.
And that's amazing, it is. I wouldn't I wouldn't initially think, hey,
guy with a degree in mathematics would be the best
person to run a bookstore. I would think his brother,
(11:33):
who's who is a teacher, would be. But apparently it
was a match made in heaven. They also did something
really smart, and they took this b I S and
they sold it to other bookstores as well. Right, So
it wasn't like they had no, this is our secret
saace and you can't have our secret solace. They said, no, no,
this is a very useful system. It will come in
(11:53):
handy and they that was another business. In fact, they
operated it as a spinoff business this for a while.
They sold it off I think in the nineties, but
they were still you know, and this is still in
the seventies too. That's that's an era where there's still babies. Yeah,
well they're giant giant babies. Yeah. Personal computers are not
(12:15):
really even a thing yet. If you're buying a computer,
you're buying a very expensive large machine, right, because this
is not this is not yet the era of the
Apple two or the IBM PC. This is just before that.
So yeah, they were using these larger systems in this
this custom made inventory system, and it was really going well.
(12:36):
I mean, I think they could have probably just moved
over to this b I S system, selling it to
other places, updating it to keep up with the times,
and been successful, but they didn't do that. They also
expanded their bookstores as well. They opened in other locations.
So they opened some in Michigan, but they also expanded
beyond Michigan. Uh. They opened up one in Indianapolis and
(12:58):
another one in an odd location considering that their home
base was in Michigan. Do you know where that is? Atlanta? Yeah,
it's right in our hometown, I mean in the Atlanta's
big So it's a good hub. And and believe it
or not, we know how to read. We do. In fact,
(13:18):
we're doing it right now. Yeah. So they opened up
a store in Atlanta. And the nice thing was that
this b I S system proved to be incredibly useful
in each of those locations, and it proved that if
you knew how to use the system, you could customize
that stores inventory for that particular population. It showed that
(13:39):
different populations wanted different books. So the books that were
being sold that we're doing really well in Atlanta might
not be the same ones that are doing well in Michigan.
But the system lets you predict which ones you need
to order, so they were always on top of things.
That's pretty cool. The next really cool thing in in
Borders history is when they did in their first superstore.
(14:01):
This is the one that you probably associate with Borders
when you think of Borders or Barnes and Nobles that
had the coffee shop in it. It was Giant Um
and they hired a professional to help them expand this business,
Robert d Romualdo. Robert d ra Mualdo. That's a heck
of a name, it is. I had to keep going
(14:23):
back and looking at it to remember how to spell it,
you know, I I when I look at de Romoaldo,
I'm convinced I'm not saying it correctly, but I will
keep trying. I probably won't say the same way twice.
And he helped them grow this superstore model and it
was very successful, and by nine he was the CEO
of the company, and he incorporated new things into their superstores.
(14:46):
Now they didn't just have all of the books ever,
and some coffee shops. They also had music and movies
and things like that. Yeah. I remember walking into these
big bookstores and seeing like the entire section set aside
for music and film and thinking that's odd for a
for a bookstore. I loved it. Well, I mean, yeah,
we will talk a little bit more about the music
(15:09):
and movies stuff a little later, because it's another one
of those factors. Yes, yes, but you know I loved
it at the time because I could go find the
book and then I could go find the VHS of
the movie version, yeah, of the bus, right, so you
can you can read The Princess Bride while you watch
The Princess Bride. That would be a sobering experience. They
don't exactly match up. Is pretty close though, I mean
(15:31):
Golding also wrote the screenplay. But in the early nine nineties,
at this point, Borders is doing well and starts to
head toward an initial public offering to go from being
a private company to a publicly traded company. So under
the proposed I P O, the company they had not
yet launched an I P O. But they were in
(15:51):
the preparation for it, and that that involves a lot
of work, a lot of very technical legal work, to
to set what the stock price should be, what you
think the opening price is going to be, how many
shares you plan to offer? That in turn tells you
how much you think your company is worth. Right, because
if you say we're going to open at twenty dollars
a share and it's going to be X number of shares,
(16:13):
then you multiply those two numbers together and say, oh,
so you think your company is worth blah blah blah.
It's like you're going on shark take, except for you're
already established. Yeah. So they had estimated that they were
going to have three point six million shares of stock,
and at the stock price they were looking at, uh,
that would have given the company of value of one
(16:33):
hundred ninety million dollars. Not too shabby. But they didn't
end up doing the I p Oh. Something else happened.
Another company swooped in. Yeah, of all things, Kmart swooped
in and they said, hey, we're going to buy borders.
They had already bought Walden Books, and they had bought
(16:56):
that back in the eighties. Yes, yes, and now they
wanted to buy Borders as well. They were hoping that uh,
merging these large bookstores would bring them a lot of
extra revenue. Yeah, they were looking at Walden Books, which
had a lot of like mall locations. That's where I
always remember Walden Books, not as a standalone but as
a mall bookstore, more of an express experience. Yeah, and
(17:19):
then you had Borders the larger bookstores. And then they
also owned a few bookstores that were connected to Walden
Books but were called Bassett Books. That was largely in
the Northeast. There are all books about dogs, yes, the
Bassett Hound Books. No, it was it was another chain
of a small chain, like a regional chain of large bookstores.
(17:40):
So yeah, that was kind of there. There um their
strategy moving forward. And and at that point Borders consisted
of twenty one bookstores. Yes, and in after Kmart bought them,
they became the Borders Walden Group. And things look pretty good.
But things we're about to change. Musical sting. Yeah, so
(18:07):
we'll explain how they're about to change in just a moment,
But first we're going to take a quick break. All right, now, Ariel,
you were saying things were about to change. What did
you mean by that? Well, I meant that things were
actually going to get a little bit worse than a
little bit better, and then pretty better and then a
(18:28):
lot worse. Okay, could you perhaps elaborate? Yes. So Kmart,
like we said, bought borders they expected to bring an
extra revenue, and it did. Under their their first year
under Kmart, they brought in about two d foot eight
million dollars profit. Nice. Yeah, And in ninety four they
(18:51):
reached one point five billion dollars in sales. That's also
pretty nice, but surprisingly not enough. So Kmar was struggling.
They were having some financial troubles and borders Walden was
not helping as much as they had hoped. So there's
there's some slight variation in reports. Some people say that
(19:14):
kmars like, uh, we're gonna we're gonna ditch these bookstores
and let them become their own thing, and some some
reports say that these bookstores are like, hey, we're gonna
become our own thing later. Yeah. Whether or not it
was a decision made internally from the book side of
things or internally from the Kmart side of things, the
(19:35):
result was the same. Kmart did spin off the Border's
Walden Group, although at that point it had become the
Borders Group. So Borders Group gets spun off into its
own company and gets put back on track for that
I p O that was so hoping for. They finally
get their public offering UM. Now right afterwards they bought
(19:59):
share that came it still had in them, so Kmart
had retained at ownership and then decided that or at
least the Borders Group folks decided to purchase that back
from their former parent company. Yes, and in seven they
had really good luck with their public offering. They ended
up closing at forty four eight cents of share. That's
(20:22):
that's a pretty healthy per share price. Yeah, it was
healthy enough that they did a two for one stock split. Yeah,
we talked about those in the past. It's where you
double the number of shares, but you have the value
per share and it helps it helps inspire liquidity, it
helps inspire smaller investors getting involved. Yes, and and all
(20:43):
of the success UM encourages them to expand into Europe
and Asia, So now they're starting to open international locations there.
Their first store was opened in Singapore and they opened
up forty more stores, so rapid expansion of this point,
and their plans were for an international superstore chain with
(21:04):
a thousand locations. Yeah, and at that point they had
just a little more than two hundred locations. So a
lot of people also point to this era as being
in retrospect a dangerous one for Borders in the fear
that they were trying to expand too quickly and too aggressively.
(21:25):
There are a lot of stories that talk about Borders
the company that was opening up stores like crazy in
the nineties, Like, there are a lot of stories about that. Yeah. However,
in two thousand's now at this time, Amazon's also become
becoming big. Yeah. This is a right around the time
where Amazon was. They hadn't yet become profitable, but they
(21:48):
were becoming more of a player in especially in the
I mean Amazon started in the book business. Yeah, they
were just a bookstore, and to be fair, they weren't profitable,
but they were bustling. Like from the get go, Amazon
had high, high traffic. Yes. Yeah, so while while it
wasn't yet the goliath of goliaths that Amazon is today,
(22:14):
it was, it was doing well enough where it could
survive the dot com crash that was on the horizon
and make it through the other side and actually start
to turn a profit. And de rom Nualdo knew he
could see that this was this could be a big threat,
and he decided that Borders needed to adapt to meet
(22:35):
this threat, and so they created Borders Online. Yeah, so
important step that he recognizes that the internet is going
to be a really pivotal thing for commerce in the future. However,
launching an online presence is sometimes more difficult than it sounds. Yeah,
(22:59):
it takes a while to get notice, it takes a
while to get traffic, it takes a while to become
muscle memory for your consumers, and it takes a while
just to work out the kinks so that you've created
an experience that people enjoy. Yeah, and so when they
launched this site, they had some initial losses and the
(23:19):
investors freaked out and they said, nope, we're shutting it down. Yeah,
we're gonna we're gonna remove this. It's a drain on
our attention and our money and our time, so we're
going to close it off. And I would say this
was their first really big mistake. Yeah, they gave up
too quickly. Yeah, because a lot of and we have
(23:41):
more into it later, but a lot of analysts say
that them committing to the market late was what really
contributed to Yeah, and it's interesting because they didn't really
commit to it late. They well, I guess you could
say they committed to it late, but they carefully they
(24:03):
attempted it earlier. Yeah, I was. I feel a lot
of sympathy for for Borders at this time because you're
talking about again. In hindsight, it's so easy to say, right,
because the Internet has become such an enormous powerhouse in commerce,
But in the late nineties, everyone was pretty sure the
(24:25):
Internet was going to be really important for commerce, but
no one knew how. Yeah, and so it's kind of
callous to dismiss a company for saying, all right, well,
this isn't working for us, because it wasn't working for
a lot of people. Only a few companies had really
started to hit on that that method that would make
(24:45):
online business work, and Amazon was one of them. Yeah.
But it also it also did another thing. So not
only did this the initial losses freak out the investors
and get Borders Online shut down, it also meant that
they were looking to replace de Romoaldo thank you. Yeah, yes, Um,
so they did. Yep. So he gets he gets the
(25:09):
boot and gets replaced, and is replaced by Philip Feffer,
who ends up transforming the company and leading it for
the next decade, right, just for a few months. But
he just leads it for a few months. I don't
know if he transformed the company at all. Reign he resigned.
Usually if you transfer, if you leave, if you resigned
after a few months, if you've done any transforming, it
(25:31):
is not the good guys. I mean, maybe he won
the lottery and like piece gays them out. So who
do they turn to when Feffer leaves? You know why
I'm asking you that, right, because it's a horrible name
to say, Jonathan, You're very mean. De Romoaldo he comes
back first. Yes, then you get the other names. See
now I said the hard one, Now you get the
(25:52):
easy one. Greg Joseph Owitz, thank you. Yeah, Joseph Owitz
comes in, So Di Romaldo steps back in temporarily. But
then Greg Joseph A. Witz comes in and becomes the
new CEO. And this is the transition from the nineties
into the two thousand. Yes, there there is one side
(26:12):
note before we get fully into the two thousands. Which
is border Spot a toy company called All Wound Up. Yeah,
I had never heard about this. I hadn't either. It's
another bad decision, I feel, because they didn't even look
at adding toys to their superstores until the later later
in the two thousands till two thousand ten. Yeah, and
(26:33):
so they sat on a company for a decade without
incorporating it into their their major brand. Yeah. And maybe
All Wound Up was doing fine on its own. I mean,
we did a whole episode about toys r US. We
know how toy companies weren't doing so great in the Yeah,
but it's it's a missed opportunity. Yeah, I agree. So
(26:56):
this is another one of those moments where people point
to and say this, this might be Yeah, okay, it
was bad that they didn't commit to e commerce early enough,
But then they point to this decision coming up that
they say, no, no, that was really what killed him.
And that was when they decided to make a deal
with Amazon to sell their books. Yeah, so all right, again,
(27:19):
I feel sympathy again in hindsight, saying, handing the keys
to your car to a to a person who's dressed
in a shirt that's got black and white stripes and
they're wearing a mask and they have a ball and
chain hooked up to one ft. Maybe that wasn't the
best idea, Like, hey, that guy just stole my car,
(27:41):
that's what That's the way a lot of people paint
this is. Like, so Amazon's and online bookseller borders ends
up handing over their online business to their their online competitor. Yeah,
they decided to outsource their online sales. Yeah, But on
the flip side, like we were saying earlier, establishing a
web presence is tricky, even today when people think that
(28:05):
they have a real good handle on how online works, right,
I've seen it. I've been in companies that have been
a part of that where a big company comes in
and rather than developing their own platform, which is hard
to do, like for the same reasons we were talking
about earlier, they'll go and they'll look for another company
to either purchase that company and just have them handle
(28:28):
that part of it. Like it might be a smaller
company that already does online stuff and say, well just
buy them and they'll be our online presence, or they'll
contract it out. Like I get it, because if your
business isn't already natively the Internet. You have to learn
all of that in order to operate in that space,
(28:49):
and that's a lot to learn, and it could be
very different from the business that you typically handle. And
also you look at some businesses when they try to
diversify what they do too much, it causes fairly or
they stretched themselves too thin. So maybe keeping those resources
to what is really your your core competencies as we
would say in the old consulting days that I I
(29:12):
don't talk about very much. But yeah, yeah, so I
feel sympathy for this, but I also admit, Yeah, this
ended up being a pretty big miss. Borders had a
lot of pride in their name, in their brand, and
this really deluded it. Yeah, I think there was still
a belief at this point that the real world experience
(29:36):
of walking into a bookstore could have enough of a
draw on its own that they weren't going to cannibalize
they're in store sales by partnering with Amazon. As it
turns out, that was a hope based on dreams. Also,
around this time, they their investors were not very happy
(30:00):
with how management was working. Obviously, they had a CEO
resigned after just a few months. Yeah, that that doesn't
look good. They hired those investors, hired Merrill Lynch to
look at how to move the company forward, how to
make sure it was profitable and being managed correctly. They
looked at recapitalization, They looked at a leverage buy out.
They looked at having a company acquire them, or acquiring
(30:22):
another company and doing a merger um and they decided
to stay independent. At the time, so Borders wasn't it
was coming and going. They weren't always meeting their projections,
but they were still they were they were money, Yeah
they weren't. It wasn't like hitting that long decline yet. Yeah. Yeah.
So then two thousand four they hire a new chief
marketing officer named Michael tam in order to rebrand and
(30:44):
too really to position the stores as being like the
center of a community experience, like that idea that it's
separate from something you would get online. You can go
and separate from something you could get in a small bookstore.
So you could go, you could eat your lunch, you
could have a feet, you could read a book. You
need a muffin the size of a child's head, Yes,
those are the best muffins. Childhead sized muffins. Yeah, marketing
(31:09):
them is a little tricky, but they are tasty, yes, So,
so they focus on the community. They do some brand repositioning,
They acquire a company here too, They make some Walden books,
some Borders expresses. Uh. They make a deal with Starbucks
so they can sell Seattle's Best Ye in their bookstore.
(31:31):
This triage looked like it was successful. Um. In two
thou five, they posted profits of a hundred and one
million dollars and they launched their Borders rewards program. Yeah yeah,
which I was a part of back in the day. Uh.
And in two thousand six, Josepha Witz announces that he's
going to retire, and well, they've already chosen his successor,
(31:55):
a guy named George Jones. And they do something that
we have always stressed as being a very important thing
in any kind of corporate structure, which is having a
solid transition plan so you can have that transition not
just of power, but of knowledge. Yeah. When JOSEPHO Witz
said that he was retiring, he said, I'm planning to
retire in about two years. So they didn't wait for
(32:16):
the end of those two years to bring Jones on. Yeah,
which a good idea. Yeah. Also at this time, Pershing
Square invests in the company for an eleven percent stake.
But not all good news, because while this year would
be a good one for them, it would also be
their last good year. Yeah, it's the last time that
they would turn a profit. Jones comes on border stock plummets, yes,
(32:42):
to twelve dollars and twenty eight cents of share. Oh
that's a big drop. Yeah, that was a serious fall
from grace. So they quickly react by selling off some
of their subsidiaries. And I like in your notes here
because I couldn't help but make a snarky joke based
on it, so aerial. Don't they get rid of England
and Ireland and the rest of the UK? So I
(33:04):
wanted to reassure my listeners out there, England, Ireland and
the UK are still their borders. Just got rid of
their subsidiaries in these countries. Yes, they lost around a
hundred and fifty seven point four million dollars, but this
isn't about about like, here's as bad as it ever got.
We're now at the brink of true disaster, which we
(33:27):
will get into in greater detail in just a moment.
After this break. We left off with the shares dropping
down to twelve dollars and twenty eight cents. And we
wish we could tell you that's as bad as it got,
but it just got worse. Yeah. In two thousand eight
(33:47):
they went down another to just five dollars and seven
cents of share. Yeah, and it's still not as bad
as it would get, but I can't bring myself to
get there that quickly. So at this point they take
a loan from Pershing Square, who's already an investor. Yeah,
they had taken that eleven percent steak earlier. Yes, And
they take four two point five million dollars, and then
(34:11):
they put themselves up for sale. Yeah, they might have
even entertained. In fact, I'm sure they would have entertained
and offer from their arch nemesis, Barnes and Noble. Yeah,
Barnes and Noble was looking at if they wanted to
put in a bit, and they declined. Then they did
some more restructuring. They cut ties with Amazon, and they
made borders dot com. Yeah a little too little, too
late as an and then they cut a hundred and
(34:32):
fifty six jobs, which saved them a hundred million dollars. Yeah,
but they also sell off all their stores that are
over in the South Asia area, like in the Australia area. Yeah,
and then they lost more money. So by the end
of two thousand and eight, they had lost a hundred
and eighty seven million dollars and that was not great news,
(34:54):
great news. Great news for George Jones was terrible, terrible smell.
And George Jones got the boot. So he had come
into a pretty tough situation. It had gotten tougher, but
the Border Directors was not going to try and wait
and see if George Jones could turn things around, so
instead they replace him with a guy named Ron Marshall.
(35:16):
Ron Marshall, I feel bad for him. He didn't come
into at a bad time. He came in at a
worst time, the worst time because was the company doing badly.
Pretty soon, all of North America and by extension, the
rest of the world was going to have a real
tough time. Yes, we were hitting the global financial crisis
and a great recession, and so Border starts closing their
(35:38):
wild and books. I get it, because you know that's
not their flesh and blood. That's just yeah, this is
too anecdotal. I don't go to malls anymore. The few
times when I go to malls, I definitely don't see
the type of stores that were around when I was.
When I did go to malls, I mean I do
shoe stores, shoe stores, Claire's. If I want to get
if I want to get stuff pierced by a gun,
(36:01):
game stop Malls. Yes, just stands listen. I I do
go to malls, and and there's a lot of clothing
stores and some food stores, and a couple of electronic
stores as usually either an Apple or Microsoft. I'm getting
off topic. I really just want to go shopping at
this moment. Well, let's get back onto onto the track here. Yeah,
there's there's a few there's a few little book stores,
(36:23):
but they're more like calendars and games. Yeah. So they
continue trying to to cut huge amounts of costs. They
end up closing two hundred stores. They lay off another
fire people. They had gone from having more than a
thousand stores at their peak to fewer than two hundred.
(36:47):
So you know that the arrow we talked about where
they were really focusing on expansion, they're back now below
where they were at that point. Yeah, and now they're
also fighting e books. The rising popularity of e books,
which means that their two thousand nine holiday sales were
not great. They dropped thirteen from their norm. Yeah. This
would have been also the era where all the bookstores
(37:09):
were trying to come out with their own branded, proprietary
e readers. That was that was rough times too. It
was just after a year Marshall gets kicked out. Didn't
last very long at all. Yeah, Mike Edwards comes in
as interim CEO. More layoffs occurred, They pay back some
(37:29):
of their loan and they restructure the rest. So that's
that's a good step. Maybe things are looking up. Then
they get their more permanent CEO been at Le Beau
or Labao, and Edwards moves to being CEO of their
subsidiary branches. And that was after Bennett had invested about
twenty five million dollars in the company. And so then
(37:51):
they say, all right, what can we do to address this?
Beyond closing locations, they decided to try and update their yes.
So they do things like start selling e readers, but
instead of having their own one brand of e reader
like the Barnes and Noble Nook, they still six different kinds. Yeah,
(38:12):
this was where we started getting into that brand confusion stuff.
And by then, but then the Nook in the like
the Kindle, the Kindle was really the ruler of the
roots because Amazon had really positioned the Kindle for success
and would continue to do so. As Amazon would unveil
new programs like the Prime Membership, they would throw in
(38:34):
incentives like, you know, a discount on a Kindle reader.
And so Amazon was absolutely determined to dominate that space
and they that's what they did. And Barnes and Nobles
did all right, because Barnes and Nobles jumped on it immediately.
Borders was a little late to the game once again.
They launched an e library, which Barnes and Nobles also did,
(38:54):
but Barnes and Nobles did it eight months earlier. Yeah,
so their Borders is running a year late on all
of this technology. Um, they sell off their paper Chase acquisition.
They had bought paper Chase a while ago, and they
lay off more workers. Yep. They end up losing more
than forty six million dollars by that second quarter. So
they say, all right, well, let's keep on trying to
(39:15):
fix this. Uh. They start trying to put those toys
and games in their stores. Like we had mentioned earlier,
they launch a new website. They make another attempt at saying, Hey,
Barnes and Noble, how about maybe now pretty please, like
we look real, real cute. Yeah, And and Pershing Square,
who was owned by Bill Ackman, who was kind of
(39:35):
helping trying to help Borders really succeed, offers to help
finance the merger between Barnes and Nobles and Borders. But
still no dice. So yeah, by the end of it's
getting to the point where it's impossible to deny inevitability.
They are looking at the very real possibility of going
(39:57):
out of business. They had lost another seventy four million
dollars in the first quarter of ten. They delayed vendor payments.
They started to try and figure out if they could
maybe make a deal where they wouldn't have to pay
cash upfront for the book stock. They would only have
to you know. It's it's kind of like when Nintendo
(40:17):
offered to the same thing. Yeah, they said, we'll provide
all the stock, you don't have to pay us, just
pay us if you sell the console. That's kind of
what Borders was doing, except on the other side of
publish just publish. Just don't like that very much. No,
No publishers like it when you buy their books. They're
so great about like, no, I'll give you a whole
bunch for free, and then you just pay me if
(40:38):
you happen to move them. They're like, look, you guys,
it looks like you might be looking at bankruptcy. We
don't want your debt. Yeah. They kept on trying, but
it just wasn't really moving anywhere, and by February, the
New York Stock Exchange pretty much put the nail in
the coffin because the stock exchange there there are rules
(41:02):
were being listed on the New York Stock Exchange. You
have to meet certain criteria, including a certain share price,
or else the stock market will delist you. And I
think it's like a dollar. I think a dollar is
that minimum. And they were in ninety cents to share. Yeah,
so they got for a while. It wasn't like they
hit ninety cents in New York Stock Exchange said you're out. Yeah,
(41:23):
so they tried to go into chapter eleven. They said
that they had one point to seven billion dollars in
assets and one point to nine billion dollars in debt. Yeah,
they had some investors lined up and they eventually backed out.
So they were Originally when they went into when they
went into file for Chapter eleven, they were hoping to
(41:45):
be out of bankruptcy by September. They had some bids,
a bunch of like I said, they all kind of
backed out. It all fell through. They had a buyer,
Najafi was looking to buy them, but the Borders creditors
didn't like that. Yeah, they were afraid that Najaffee was
just going to come in liquidate all the assets and
(42:05):
then sell them off and then the debt would be
left with whomever the you know, was still around, And
they said, no, we don't want to do that. The
creditors are like, well, we feel like he's kind of
a shark. We'll kind of we'll do this, but we
have to pick who the liquidators are if they liquidate.
And and it was just this big ordeal between the
Jaffee and the creditors and the publishers and they couldn't
(42:27):
come to an agreement, and so the Jaffee pulled out
as well. Yeah, so then it ends up having to
go to liquidation anyway, It ends up going up for
auction and goes into the company goes into Chapter seven bankruptcy.
So Borders liquidates their stores. Most of them are liquidated
(42:47):
by July, includes all the Walden books as well, and
the books you know, the book Kiosks when it went
into chapter seven. At that point had been the second
largest bookstore chain, just behind Barnes and Noble. It's so
sad because I don't think Barnes and Noble would be
what it is if it hadn't been for Borders. Uh.
(43:08):
And then now Barnes and Noble actually owns intellectual property
of Borders. They spent thirteen point nine million dollars for
it to have the intellectual property, So let's answer that question. Though.
Why did Barnes and Noble survive but Borders didn't. I
think it was late adoption to the trends. I mean
(43:32):
that that's really what it is. Are there are some
other things, so they were late to commit to. Yeah,
they were late to jump on the on the e
book train. They they invested in CDs and DVDs at
a time when people were looking at digital media the books,
just as the population was starting to migrate from physical
(43:57):
media to digital media where they were downloading stuff instead
of just buying the hard copy stuff. And then my
assumption is they also weren't bringing things into their store
that people couldn't download, like the toys, like the games,
things like that. Also, some analysts say that expanding internationally
pulled them too thin as well, but I think that's
probably a smaller piece of the puzzle because one of
(44:18):
the fun facts I have later on a combination of things, again,
like the super aggressive stance on opening more locations probably
was over extending their reach a little bit. And then
as you say, these late adoptions of these very critical
technologies would end up haunting them so well, and CEO
turnover didn't Oh sure, Yeah, that was another thing, right
(44:41):
where you you put someone new in charge and if
things don't immediately get better, saying let's change it out again.
Like sometimes that's necessary. Sometimes you put someone in charge
and it becomes very clear, like we made a terrible decision.
But in other cases factors that have nothing to do
with the leadership. It could be external factors that the
(45:02):
leadership is dealing with and maybe maybe things would have
been worse without that leader in place. Yeah, And I
mean so when you see one CEO go out quickly
one or two, that's understandable. Once once you get a
rash of the CEO cycling in and out then just
freaking out. Yeah, exactly. The board directors doesn't have any
(45:22):
confidence in the company, and that in turn trickles down,
like the morale problem goes throughout the entire organization at
that point. So yeah, this was this was a case
of like a lot of bad factors all hitting at
the same time. That being said, while we have these
(45:42):
terrible stories to tell, we also have fun facts. Yes,
we arial likes to put these at the end of
every episode. I did a couple of them for this one.
One of the fun facts I have is that one
of the first Borders locations is now a restaurant and
craft beer pub called hop Cat. Don't know if the
original store not, but you can apparently get one of
(46:03):
up to a hundred different beers on tap there. I'm
going to imagine that the bar is built up on
old Borders books. Yeah, and then Louis Borders was also
responsible for founding another famous company that lasted only a
short while. In fact, is a company that is largely
associated with the dot com crash, and that would be
(46:25):
web Van. Web Van is one of the most notable
failures during the dot com days. It lost nearly a
billion dollars of investment when the company failed. I think
that investors had put in eight hundred fifty million dollars
into that company, and it was one of the ones
that went belly up shortly after the market crashed in
the dot com bubble burst. Yeah. He also founded another
(46:49):
company called people Media dot com. That was a company
that would archive magazine articles and it would allow people
to access them on a subscription basis. So it was
behind a paywall. Right. You would the idea being, oh,
I want to get access to this old article that
was published in say, Popular Mechanics back in nineteen sixty three,
and so you would pay a subscription. Uh. The name
(47:10):
of the company changed to my wire dot com. But
it didn't result in a successful business model. So I
don't know exactly when it went out of business. I
couldn't find any information on that, but I will tell
you that if you try to navigate to my wire
dot com now you'll get like kind of just a
bunch of generic links. It's not even it's clearly not
(47:32):
the same thing. I guess, Uh, I guess for Louis,
it was really one and done. Yeah, at least as
of two thousand fifteen, there were still international Borders. Not
again not. There's a lot of international Borders that way,
like Borders bookstores, including in Malaysia. Um so some of
(47:52):
those sold off forgot bought by other companies prior to
Borders going under and they still exist. Yeah, the first
Borders location stayed open all the way to the end,
all the way to the end, which is a pretty
good benchmark. Yeah, I'm sure there was a sad ceremony
held at the University of Michigan campus and the last
(48:13):
one closed. And I love your your final fun fact here. Yes,
it's in all of my research. I came across an
article on the Washington Post from May, if you want
to look it up, on what you can still do
with old Borders gift cards. I mean, because you might
come across like you might find one stuffed in a
(48:34):
soft shore one day. Among the suggestions suggestions were ninja
stars and gifting them to people you don't like. I
like that second one a lot, figured you might well.
That wraps up this episode. We want to thank Ashley
again for writing in and suggesting these. The next few
episodes will be recording are going to all be from
(48:57):
Listener requests. So maybe some of you out there are
thinking about a company you would love to have us cover.
Maybe there's a story about an amazing ascension or a
terrible fall, and you want us to give our take
on it. If you want us to do that, writing
us is the best way to do it. Send us
an email. They can send us that email at feedback
(49:17):
at the Brink podcast dot show yep, and you can
visit our website that's the brank Podcast dot Show. You'll
find the archive of the elder episodes there and some
information about your beloved hosts. And speaking of those two
beloved hosts, I have been Jonathan Strickline and I have
been aerial casting, I'm going to go read a book.
(49:40):
Business on the Brink is a production of I Heart
Radio and How Stuff Works. For more podcasts for my
heart Radio, visit the I heart Radio app, Apple Podcasts,
or wherever you listen to your favorite shows,
Business on the Brink News
Hosts And Creators
Jonathan Strickland
Ariel Kristen Kasten
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