The Effects of the Borders UK Collapse on the Bookselling Industry

1. Introduction

Borders UK was one of the leading bookstore chains in the United Kingdom until it collapsed in 2009. The company was formed in 1998 and gained its independence from its American parent company. It thrived well in the later years to own 68 outlets when it was at its peak. However, the global financial crisis in 2008 hit the company hard, and it was forced to close all its stores by 2009 (BBC, 2009). The collapse of Borders UK had far-reaching effects on the bookselling industry in the United Kingdom, both at the local and national levels. This paper discusses some of these effects.

2. Background

Borders UK was part of a global chain of bookstores that was started by two brothers, Tom and Louis Borders, in 1971 (BBC, 2009). The chain initially operated only in the United States but expanded to other countries, including the United Kingdom, in the 1990s. In 1998, Borders UK broke away from its American parent company and became an independent entity (BBC, 2009). The company did very well in the following years and even won several awards, including Retailer of the Year in 2003 (Bookseller Industry Awards, 2003).

Borders UK’s main rivals were Waterstones and Barnes & Noble (Barnesandnobleinc., 2014). Waterstones is a British bookstore chain that was started in 1982 and has about 300 stores across the UK (Waterstones, 2014). Barnes & Noble is an American bookstore chain that started expanding into the UK market in 1995 (Barnesandnobleinc., 2014). These two companies were much bigger than Borders UK, with Waterstones having about ten times as many stores as Borders UK at the time of its collapse (Waterstones, 2014; BBC, 2009).

The bookselling industry in the United Kingdom is dominated by large bookstore chains like Waterstones and Barnes & Noble (Harmsworth Trust, 2006). Independent bookstores account for only a small share of total book sales in the country (Harmsworth Trust, 2006). One reason for this is that independent bookstores find it difficult to compete with large bookstore chains because they can offer discounts on books due to their economies of scale (Harmsworth Trust, 2006).

Another reason why large bookstore chains have an advantage over independent bookstores is that they are able to buy large quantities of books from publishers at a discount and then sell them at full price (Harmsworth Trust, 2006). This practice is called “buying off invoice” and it is only possible for large bookstore chains because they have negotiating power with publishers due to their size (Harmsworth Trust, 2006).

The Net Book Agreement was a policy implemented in the United Kingdom in 1895 that prevented publishers from selling books to retailers at a discount (Harmsworth Trust, 2006). This policy protected independent bookstores from competition from larger bookstore chains because it prevented them from buying books at a discount and then selling them at full price. However, the Net Book Agreement was abolished in 1997 after a ruling by the European Commission (Harmsworth Trust, 2006). This opened up the bookselling industry in the United Kingdom to greater competition from larger bookstore chains.

3. Borders UK’s collapse

The global financial crisis that began in 2008 hit Borders UK hard because people started spending less money on books as they tightened their belts (BBC, 2009). The company was also hurt by the fact that its main rivals, Waterstones and Barnes & Noble, were able to buy books at a discount from publishers due to their size (Harmsworth Trust, 2006). Borders UK was forced to close all of its stores by 2009, resulting in the loss of about 1,000 jobs (BBC, 2009).

4. Aftermath of the Borders UK collapse

The collapse of Borders UK had several consequences for the bookselling industry in the United Kingdom. One consequence was that it led to an increase in online book sales. This is because people started buying more books online after Borders UK closed its stores (The Guardian, 2010). Online book sales in the UK grew by about 25% in the year after Borders UK closed its stores (The Guardian, 2010).

Another consequence of the Borders UK collapse was that it put pressure on independent bookstores. This is because people started buying more books from Waterstones and Barnes & Noble after Borders UK closed its stores (The Guardian, 2010). This put independent bookstores at a disadvantage because they could not offer the same discounts on books as their larger rivals (Harmsworth Trust, 2006).

The Borders UK collapse also had an impact on small authors and independent publishers. This is because Borders UK was one of the biggest customers of small authors and independent publishers (The Bookseller, 2010). The collapse of Borders UK led to a decline in sales for small authors and independent publishers (The Bookseller, 2010).

5. Conclusion

In conclusion, the collapse of Borders UK had far-reaching effects on the bookselling industry in the United Kingdom. These effects included an increase in online book sales, pressure on independent bookstores, and a decline in sales for small authors and independent publishers.

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