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Liquidation Lessons Learned Behind Borders Bankruptcy (BGP, AMZN, BKS, BBI)

The New Customer Retail Business Model That Borders Leaders Didn't Buy


Borders Begins Liquidation Sales At Its 399 Bookstores
Justin Sullivan/Getty Images News
Updated June 27, 2014

There were plenty of big book buys at the Borders (BGP) bankruptcy bargain bonanza this weekend. And there have been an equal number of wholesale speculations offered as to why yet another prominent national U.S. retail industry chain will be ending its retailing history with a liquidation sale. Even with so much speculation, there are a few ideas about the root cause of the Borders demise that haven't yet been thrown into the Borders bankruptcy speculation soup.

The obvious reason behind the Borders liquidation is that the market for the products that Borders was selling has been shrinking at a rapid pace, and therefore, some kind of natural attrition was inevitable. The observation that there is no longer a big enough pie to split market share between three major national retail booksellers seems to be the logical answer to every question about why we are saying bye-bye to Borders. But there is another question beyond that obvious answer. Why has Barnes and Noble (BKS) won the survival-of-the-retail-fittest game that Borders bookstores lost?

Seemingly there was a bit of the Blockbuster (BBI) syndrome that led to Borders' demise - too arrogant to be threatened by the upstart competition, too slow to respond to technological advances, too focused on shareholder returns rather than consuming preferences. But even those are just the effects, not the root cause. The Borders chain didn't suddenly cease to be a viable operation on July 22, 2011. That is a condition that the sum total of leadership thinking had been creating for a long time.

Behind the systemwide missteps that Borders made along the way was a management team that forgot its mission, lost its identity, and held onto a belief system that that was out of synch with current and future retailing reality. Borders couldn't survive its own existential retail crisis because there was no indication that its leaders realized they were in the middle of one.

If Borders leaders had fulfilled their own Borders bookstore mission... > More About Leadership Lessons Learned from Borders Bankruptcy >>

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  9. Liquidation Lessons Learned Behind Borders Bankruptcy - The New Customer Retail Business Model That Borders Leaders Didn't Buy (BGP, AMZN, BKS, BBI)

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