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Simba Information's Book Publishing Report Tracks Borders 'Perfect Storm of Missteps,' Provides Lessons for Other Retailers


February 16, 2011 - Stamford, CT

Simba Information's newsletter, "Book Publishing Report," is running a special feature written by Michael Norris that details the 'perfect storm of missteps' that led to the Chapter 11 bankruptcy filing of Borders, which was announced early this morning. The retailer will close about 200 of its approximately 659 locations -- and affects readers, authors, publishers and distributors around the country.

"A lot of people want to place Borders' downfall into the e-book victory column," said Norris. "But when we talk about what brought Borders to this, there are a lot of other factors involved that date back years before electronic books became trendy."

Norris, the lead author of Simba's "Trends in Trade Book Retailing" report series, writes of the mistakes Borders made over the last ten years and discusses the consequences of each one, including what he calls the most fatal 'beginning of the end' mistake: Borders relying on Amazon.com for the bookstore's e-commerce site.

"Aside from the obvious 'fox-in-the-henhouse' factor, Borders didn't realize at the time that by allowing Amazon to close the sale, it was disowning its own customer and lost a lot of tech-savvy consumers who were overjoyed with Amazon's ability to create an easy online shopping experience."

Norris also debunks several myths about Borders' relationship with e-books: The retailer actually sold a number of e-reading devices long before Amazon released the Kindle and before Barnes & Noble rolled out the Nook. Borders went wrong, Norris writes, when the retailer 'misread the market' by giving consumers too many e-readers to choose from and not being able to control how they were being presented to the customer.

"In Simba's "Trade E-Book Publishing report," we've found that the most popular piece of hardware used to read an e-book was usually whatever a consumer already owned, which is a personal computer or a smartphone," said Norris, adding that the company would have been better off creating a strong interface before focusing on hardware. "So when Borders began carrying devices, all they could say to the consumer was 'choose the e-reader that's right for you,' while Barnes & Noble could hold up the Nook and say, 'if you want an e-reader, this is the one for you.' The first Nook got mixed reviews on a hardware standpoint, but Barnes & Noble just had a more appropriate message."

In addition to Norris' feature, "Book Publishing Report" contains further details on Borders' small format store strategy, its unusual history with customer loyalty programs, and the challenges and opportunities still facing the bookstore channel. Additional information can be found at http://www.simbainformation.com/redirect.asp?progid=81089&url=http://www.bookpublishingreport.com/ and a free trial is available.

About Book Publishing Report:
Simba's monthly newsletter "Book Publishing Report" (http://www.BookPublishingReport.com) is the leading source of insights into the business of trade book publishing for over 35 years, covering deals, financials, bestsellers, legal developments, technological issues, distribution, retailing, people and more. The newsletter provides the latest news on trade book publishing, e-books, audiobooks, Internet retailing, price wars and independent book stores.

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Please direct all media inquiries to:
Warren Pawlowski
press@simbainformation.com

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