Bad Times at Borders

continued

Barnes & Noble, in contrast, seems to have kept a clearer focus on books and publishing. It also benefited from founder Len Riggio’s creativity and competitive zeal. “Riggio is one of the brilliant guys in retail,” says Morris Rosenthal. “He figured out that B&N could publish a growing percentage of the books they sell, underprice the competition, and earn the publisher split.” Reportedly, more than 10 percent of B&N’s sales now come from its own imprints.

“Riggio, whatever people might say about him—that he’s a philistine, not enough of an intellectual—he is a good businessman,” Rosenthal says. “He’s run that company quite well in the face of really unprecedented competition.”

According to the two company’s federal filings, B&N stores are larger and have more books, on average, than Borders stores do. The average Barnes & Noble store outsells the average Borders by $1 million a year and has higher profit margins too.