With rising food and gas prices and the current housing woes, we’re definitely entering uncertain/ tough economic times. Even the big retailing giants are starting to feel the pinch.
There’s been a lot of speculation about whether Barnes & Noble is positioning itself to buy one of its main rivals, Borders.
Borders is floundering. According to Forbes, the company posted a $157.4 million loss, roughly $2.68 per share this February. That’s an increase over the previous year, in which the bookseller experienced a $151.3 million loss.
Chains like Barnes& Noble face similar pressures to independent bookstores – competing with ecommerce giant Amazon and Wal-Mart, which is drastically lowering the prices of the books it sells.
When the last Harry Potter came out, many smaller book stores substantially decreased how many they had on hand because they just couldn’t compete. The suggested retail price was $34.99 and Overstock.com sold it for $17.95, Wal-Mart for $17.87 and Target for $17.99. Stores like Wal-Mart can afford to substantially mark down a book because they know that once they draw shoppers in, they’ll fill up their shopping carts with a myriad of other items.
I’d prefer the two chains stay separate. I think having competition in the marketplace is a healthy and good thing. I also worry the effect this would have on smaller independent book stores. I tend to lean in favor of Borders versus Barnes & Noble. I like that you don’t have to pay $25 per year to have a Borders rewards membership card. (Although they did make some changes to the rewards program that I wasn’t too crazy about.)
Borders is taking steps to stem the tide. The company is currently opening concept stores, which will feature wireless Internet service, a digital station at which customers can do a range of cool things such as create their own CDs, download books, publish their own books or create photo books.
The verdict is out whether this will help turn around sales.
Additional reading:
Borders CEO expects investments in stores, Web to bear fruit, http://www.forbes.com/feeds/ap/2008/05/22/ap5041066.html
Barnes & Noble loss widens, weighing Borders bid, http://ca.us.biz.yahoo.com/ap/080522/earns_barnes_noble.html
No substantial talks on sale, Borders' CEO says, http://blog.mlive.com/annarbornews/2008/05/no_substantial_talks_on_sale_b.html
Would A Bigger Barnes & Noble Kill Independent Bookstores? http://blogs.wsj.com/deals/2008/05/22/would-a-bigger-barnes-noble-kill-independent-bookstores/
Borders' Popular Rewards Program Proves Both Too Popular And Too Rewarding,
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