No Single Bidder for Borders
Borders, according to several reports, is in early discussions
with an unidentified company to sell 225 of its stores after failing to find
a single bidder to buy the whole company. The chain had originally
set May 6 as a soft deadline to make a deal to sell the business.
Rival Barnes & Noble,
according to The Wall Street Journal, made an offer to acquire 10 stores along
with Borders’ website and its customer list.
Many seem to believe that access to the over 40 million individuals enrolled
in the Borders Reward Loyalty program is the key motivator in any pursuit of
the bookstore chain.
A piece on Benzinga.com speculates that Amazon.com may
be the unidentified party that is looking at a partial acquisition of Borders.
desire to acquire Borders’ customer list is easy to grasp, but the
piece, written by Benjamin Lee, suggests that Amazon may be interested in
acquiring store locations in anticipation of the day when it has to collect
sales taxes in most states.
"If (and when) Amazon loses this tax battle, having physical stores
would allow the company to have a greater presence in cities nationwide —
something its customers have been clamoring for. If prices are comparable,
consumers statistically prefer to purchase items at physical locations, as
they can see and test products in person. The ability to return and exchange
items easily is another added advantage," wrote
Reports suggest that publishers are willing to work with Borders in
the hope that the chain can be saved. The loss of distribution would severely
hurt the publishing business, with many executives believing that physical
stores are still the best method for encouraging incremental purchases.
it is still business as usual until some resolution takes place.
"We are focused on moving forward with the execution of our business
Mary Davis, a spokesperson for Borders, in an email to Bloomberg News. "We
are continuing to evaluate interest in the company as expressed through the
ongoing Chapter 11 process."
- Borders Mulls Piecemeal Sale – The Wall Street Journal
- Borders Group Said to Find No Bidder Willing to Buy Entire U.S. Bookseller
– Bloomberg News
- Rivals to Allies: Is Amazon the Secret Bidder for Borders? – Benzinga
Discussion Questions: What do you think is the most likely scenario for Borders? Should it fail to find buyers, what will the loss of Borders mean for the publishing business at retail?