"There was certainly nothing we could do."
—-Jim Urie, UMGD on demise of Borders


Industry Pundits Speak Out on the Demise of National Retail Chain
As Spotify moves into the US market, making a big splash and further moving the music industry towards the digital model, we mourn the passing of yet another brick and mortar player.

Borders Books & Music, unable to find a buyer in bankruptcy, abruptly went into liquidation last week. Over the last two years, Borders had shrunk their music sku count to record lows, but it still stings, especially in some specific genres. Some see similarities between this and Tower, however the losses to the music industry are drastically different.

At the time of Borders’ Chapter 11 filing in February, the industry's debt was a fraction of the losses incurred by Tower’s disappearance. Sony was owed $4.2 million, UMG $3.7 million, WEA $3.4 million and EMI $1.8 million. And those numbers had been whittled down over the last year, in some cases by as much as two thirds.

Just how much of a blow is this? "They were very important in some things and not in others," says UMGD topper Jim Urie, "As opposed to Tower, which was important in everything. But Borders was very important in Classics, for instance. Not as much as Tower was, but still a major player. Borders, for instance, couldn’t sell Rap at all. But, in certain genres, Classic, Jazz or the Bocelli or Groban audience, they were really impactful."

And what about catalog?  Rhino RecordsRichie Gallo rues the loss: "It’s the demise of another valued customer that carried extensive titles of catalog. We always looked forward to partnering with an account like that and it’s just another reminder of lost opportunities for those of us that are trying to promote our individual catalogs. This just made it harder to keep this valued music in front of an important consumer demographic, looking for the great classic music that we represent. It’s a much bigger blow for catalog divisions than it is for the front line guys."

Some are a bit more sanguine about Borders’ passing. Sony Distribution’s Darren Stupak: "While it is disappointing to lose a valued partner like Borders, which in the past did a good job of promoting adult-oriented and emerging artists from across a number of genres, consumers continue to have a variety of compelling retail options in the marketplace from which to choose."

Stupak is convinced that the Borders customer base will migrate to other retailers. "In the first half of the year, we have seen creative and innovative campaigns and promotions from a number of accounts targeting similar audiences that demonstrate that former Borders shoppers still will be able to discover and purchase the music they want."

The obvious beneficiary should be Barnes & Noble. AEC’s new President Mike Davis, whose company racks B&N, agrees that in the long term that will be the case, but not right away. "Short term, any liquidation is not good for the competitors," he says. "But long term, I believe that Barnes & Noble will pick up the traffic. I think that former Borders customers that are interested in finding a new solution will be very happy with both B&N’s DVD and audio depth."

Was there anything that the music industry could have done to save them? "No, nothing whatsoever," insists Urie. "We were minority vendors at Borders. There was certainly nothing we could do. The publishers could have, and maybe should have, done something. But they made the same decision that we did about Tower."

There is a feeling voiced quite often that the industry could have done more to stop Tower from going into liquidation.

"I hear that thrown around a lot and to be quite honest, I don’t know what we could have done," says Urie. "Tower was a big bankruptcy. Could we have chipped in $100 million and bought all of their bonds? The music industry was in no shape to be doing that."

And the book publishers obviously felt the same about Borders. So long old friend.