SOURCE: Simba Information

Simba Information

December 08, 2010 11:11 ET

Merger Between Borders and B&N Would Cannibalize Publishing Industry Says Michael Norris

STAMFORD, CT--(Marketwire - December 8, 2010) -  Borders shareholder and Investor William Ackman recently announced he would finance a $16 per share takeover bid of Barnes and Noble, effectively merging the two companies to create a book retailing empire. In an interview with Michael Norris, Simba Information's senior trade book analyst, "Book Publishing Report" discovers why such a merger would only hurt the industry.

"I can't think of a single good thing that would come about from a Borders-Noble merged entity," says Norris, a statement that rings clear throughout his interview with "Book Publishing Report." Norris reports the merger would only be beneficial to mega-stores Target and Wal-Mart, as well as online retailers Amazon, Apple, and Google, but not to the industry as a whole. "The book industry needs a large number of retailing ecosystems in place in order to remain healthy," adds Norris.

Although Wall Street firms seem happy about the merger, as both Borders and Barnes & Noble have seen a surge in their stock price since the offer was made, the increased buying leverage will not make up for the expected infrastructure and management issues. "Integrating separate book inventories, customer relationship management systems, operations and management teams will take years to complete, placing the proposed merger even further behind its competitors," indicated Norris. 

With profits already diminishing due to a continuing decline in the amount of books being purchased as gifts, normally a reliable source of sales for book retail outlets, a proposed merger would force some physical bookstores to close, reducing profits even more. "Essentially, there will be fewer places to buy books, fewer booksellers to help shoppers find and purchase books, and fewer opportunities for relatively unknown titles to be seen by potential customers. This cannibalizes the publishing industry, which will quickly feel the difference when thousands of booksellers are out of work," added Norris.

"Book Publishing Report" exclusively covers an interview with industry analyst, Michael Norris, whose authored market research is relied upon by top executives in the trade book publishing industry. The interview is available at:

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