Bad Times at Borders

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Donna Strach, a registered nurse at St. Joseph Mercy Hospital, shops the Lohr Road store every other week; she likes the assortment of cookbooks and books to buy as gifts. She uses Borders Rewards coupons but sometimes has trouble finding merchandise to buy with them. As for the digital downloads, “I don’t even understand half of that,” Strach confesses.

Gene Alloway, who worked at Borders in the mid-1990s and now co-owns Motte & Bailey, Booksellers, is less impressed. To him, the prototype store “looks like they’re starting to give up on selling books. They’re filling it up with tchotchkes.” And he finds it odd that a company that used to pride itself on selling important books now focuses on relatively few authors and titles.

“We’re as much of a bookstore as we ever were,” Jones insists. The CEO has said he loves bookstores and reading—John Grisham novels and biographies—and staffers say he visits the Liberty Street store regularly to buy books and movies. But he argues that the expanded mix of merchandise—from digital cameras to coloring books to stacks of games to more books tied to pop culture—makes business sense.

“The concept store has been wildly successful,” says Borders CFO Ed Wilhelm. According to Jones, the company set “pretty ambitious” first-year sales targets for the prototype stores—and so far, eight of the nine opened to date are exceeding them. Customer surveys, he adds, show that most customers really like the new stores.