Borders has made some big waves in publishing news as of late. Three major points are up for consideration: increased funding, a sellout, and key store changes.

The Bailout Begins:

They have received $42.5 million dollars in financing from one of their largest shareholder’s, Pershing Capital Management. The money will be used to give Borders some time to try out new company strategies that have already begun to be implemented. Publishers are taking a step back to see how things go for Borders, since the loan is a sure sign of the company’s financial strain.

Sellout:

They have announced that they are considering selling. Pershing offered $125 million for the company and rumors have been surfacing of a possible takeover by Barnes and Noble (whose 2nd largest shareholder is reported to be Pershing as well). These financial woes are what the Washington Post is calling the “changing bookstore battle.” The old battle consisted of mom-n-pop bookshops vs. the big chain stores, such as Borders and Barnes and Noble. But the two may find themselves on the same side of the dividing line fighting “big-box retailers” like Amazon, Target, and Wal-Mart that are selling books (and everything else in the world) at deep discounts. According to Publisher’s Weekly, Amazon grew 29% in its media sales, as opposed to the entire bookstore industry’s 1%. The question now will be whether this new unlikely alliance will be able to band together against their new competition or risk falling to giants, as Borders seems posed to do now.

They are changing how consumers view inventory. By about-facing their in-store bookshelves, meaning covers, not spines, will gaze longingly at customers, they hope that the covers will entrance customers and they in-turn will buy more books.

It started with their new prototype store in Ann Arbor, Michigan. Borders is displaying more of its books in the face-out position, this is in hopes of getting a wider variety of their books, from best sellers to unknowns, in the face of the customers. What this will also do, though, is cut the amount of titles that Borders will be able to stock. Face-out books take up more space, so while the books will be displayed more prominently, there will be less of them.

Side Note: Lucky for Bookhitch, by using the virtual world, we can do the same thing as Borders without losing inventory! Our version of about-facing your book is our premium services, where you get priority in search queries, a picture of your book, and your own separate web page and URL. All of this without losing an inch of space! We have also found that premium listings garner a lot more attention when compared with free listings (which do not have covers).

Views from an Industry Insider:

Where can we predict the new battle between all bookstores and “big-box retailers” to head in the future?

In terms of head-to-head competition between bookstores and big-box stores, there won’t be any change. Big box stores compete on price alone. They offer nothing in terms of selection, alternative reading options, or other very valuable options readers cherish.

If Borders sells to competitor Barnes and Noble, how will this change the book market? Will it give a company like Barnes and Noble an unfair advantage?

This isn’t a case where the merger is going to make any difference in how books are sold. It puts more power into fewer hands, which is always bad news for authors. But in terms of an unfair advantage…well, Borders had launched it’s own imprint at one time. Now, there’s an unfair advantage for the bookseller against publishers and authors!

How will it affect authors and publishers trying to sell their books through these large bookstore venues?

The one benefit publishers might see is a better ability to push specific authors by saturating geographic locations in a way that isn’t possible with two separate big sellers. It can offer more cohesive strategizing and allow for lower costs in the long run. However, the benefit probably won’t help out with author’s issues such as making the market more open to new authors or helping midlist authors sell more copies.

How will Borders new strategy to about-face books and cut inventory help and/or hurt big-name and unknown authors?

The face-out policy is a very good move. Face out books always sell more than those with only the spine showing. I’m conservative about this move because it clearly means less choice in the stores. However, if it means only a small reduction in number of titles in exchange for more robust returns for publishers and big boosts for the remaining authors, then the idea could be a big step in revitalizing publishing in America.

Questions for you to consider:

Will bookstores place more emphasis on the covers when choosing which books to accept into stores?

How do you feel about less titles but better visual presence of Borders books?

How will it affect you?