SOURCE: Simba Information

Simba Information

February 18, 2011 12:00 ET

E-books Not to Blame for Border's Failure, Says Michael Norris on Bloomberg's Bottom Line

STAMFORD, CT--(Marketwire - February 18, 2011) - Simba Information's senior trade analyst Michael Norris was interviewed on Bloomberg's Bottom Line, discussing what led to Borders' chapter 11 filing and how this will impact the retailer's outlook going forward. Norris attributes the failure to a long history of mismanaged operations including an e-commerce partnership through Amazon and its small format Waldenbooks locations.

"Borders entered into an affiliate agreement with Amazon.com, which allowed it to collect money from having a website and selling books online without investing in it itself," said Norris in the interview. "Since Amazon maintained the platform, Borders didn't control the relationship with the consumer, essentially helping its competitor do more business."

Norris, author of Simba's Trends in Trade Book Retailing, also notes an identity struggle with Waldenbooks, Borders' smaller format stores, which are largely unprofitable.

"Borders doesn't know what to do with the Waldenbooks stores, they're different from the megastores," Norris added in the interview. "They have to make the two brands work or choose one over the other."

Concluding the interview, Norris was asked whether or not bankruptcy will benefit Borders and allow it to become competitive again. Norris answered, "Chrysler came out of bankruptcy and is now much stronger; the same could happen with Borders if all goes well, although I would expect it will have a smaller footprint in 2011."

In addition to Norris' interview, Book Publishing Report contains further details on Borders' partnership with Amazon and its small format store strategy in the article "Borders: A Case Study of Bookselling Gone Horribly Wrong." The article can be found at: http://www.simbainformation.com/redirect.asp?progid=81104&url=http://www.bookpublishingreport.com/content/borders-case-study-bookselling-gone-horribly-wrong

Bloomberg's interview with Norris can be accessed here: http://www.simbainformation.com/redirect.asp?progid=81104&url=http://www.bloomberg.com/video/66799334/.

About Book Publishing Report:
Simba's monthly newsletter Book Publishing Report (http://www.BookPublishingReport.com) is the leading source of insights into the business of trade book publishing for over 35 years, covering deals, financials, bestsellers, legal developments, technological issues, distribution, retailing, people and more. The newsletter provides the latest news on trade book publishing, e-books, audiobooks, Internet retailing, price wars and independent book stores.

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