The future of bookstores faces new questions after Borders Group Inc. filed for bankruptcy Wednesday and announced it will close about 30 percent of its stores nationwide.
“It has become increasingly clear that in light of the environment of curtailed customer spending, our ongoing discussions with publishers and other vendor related parties, and the company’s lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor,” Borders Group President Mike Edwards said in a statement Wednesday.
Of the 200 stores that will close, seven are in the Washington metro area — two in the District, three in Maryland and two in Northern Virginia. Three other stores elsewhere in Virginia will close. California took the biggest hit and will lose 35 Borders stores.
The company filed for Chapter 11 bankruptcy with plans of reorganizing its debt. Under Chapter 11, Borders has received “commitments for $505 million in Debtor-in-Possession (DIP) financing,” Mr. Edwards said.
However, Borders said that with a firm plan of reorganization it will come out of the situation stronger and still remain among the top booksellers in the industry.
“We are confident that … a successful reorganization can be achieved enabling Borders to emerge from the process as a stronger and more vibrant book seller,” Mr. Edwards said.
When the second-largest bookstore chain in the U.S. files for bankruptcy, many questions arise about the future of books in general and where the bookstore industry is headed. The rise of electronic books, or e-books, and digital reading devices such as Amazon’s Kindle plus ongoing competition from online book-selling has changed the bookstore industry and the book itself.
E-books continue to grow in popularity, with sales skyrocketing to $441.3 million in 2010, compared to $166.9 million in 2009, and they “continue to break records,” according to a report Wednesday by the Association of American Publishers (AAP). Total sales for 2010 show a rise in all book sales from $11.25 billion in 2009 to $11.67 billion, which suggests that the book industry is in no way struggling but rather that more consumers may be turning to more technological ways of reading books such as e-books and audiobooks.
This trend may not hurt larger booksellers such as Barnes & Noble or Borders, which have driven smaller, locally owned bookstores out of business, but it could slice sales at used-book stores in the long run. Used-book stores exist on the basis that there will be printed books and the demand for classics, but with technology like the iPad and Kindle, consumers can download for free many classics such as Charles Dickens’ “A Tale of Two Cities” without leaving the house.
However, the publishers associations indicated that the idea of a world without printed books is still a far-off one.
“It’s important to note that while E-books are the largest growth area in publishing, most sales are still dominated by the print format,” said AAP’s Vice President of Communications Andi Sporkin.
Ultimately, it may be consumers who decide which direction the book industry takes and what the definition of a book will be in years to come.
“As more formats have evolved and are served by the publishing community, consumers have more choices,” AAP President and Chief Executive Tom Allen said in a press release on the group’s website.
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