Borders Group History - The Creation Of A Bookstore Chain
Brentano's, Walden and Borders - The Beginnings of the Borders Group
The Borders Group, Inc. was a publicly held bookstore chain that closed its doors in September 2011. After Barnes & Noble, it was the second largest bricks-and-mortar US bookstore chain, known for the innovation of creating the first superstore. The group included Borders superstores, Waldenbooks, Borders Express and Borders airport stores.
Where many booksellers — even other publicly-held bookstore chains — are closely identified with one owner, the Borders Group came together through corporate acquisitions.
Brentano's, Walden and Borders
The Borders Group owes its history to several separate chains — Borders, Waldenbooks and Brentano's. Brentano's was the longest-lived of the three bookstore chains that eventually made up the Borders Group. The original Brentano's store was founded in 1853 in New York City, by August Brentano, a newspaperman. The second oldest of the three, Waldenbooks, was founded by Lawrence Hoyt, a rental library entrepreneur. Hoyt opened the first Walden Book Store in 1962 in Pittsburgh, Pennsylvania; he named the bookstore for Henry David Thoreau's Walden.
Over the years they were in business, Brentano's and Waldenbooks expanded their establishments into multiple-bookstore chains. In 1984, Kmart purchased Waldenbooks; Waldenbooks then purchased Brentano's.
Brothers Tom and Louis Borders opened their first bookstore in Ann Arbor in 1971, while they were students at the University of Michigan (Ann Arbor continues to be Borders Group's headquarters).
The Borders brothers opened additional stores in Michigan, Atlanta, and Indianapolis, and developed a sophisticated system that enabled them to track bookstore sales and inventory. In addition to using it in their bookstores, they sold their Book Inventory Systems (BIS) to other booksellers, as well.
In 1985, they opened their first "superstore," a large-scale bookstore (with a coffee bar) that was to become the prototype of many that came afterward. In 1988, they hired Robert DiRomualdo, a Harvard MBA with retail experience, to help expand the business. Under his leadership, the Borders bookstore chain grew rapidly in the next four years.
Kmart, then Borders IPO
In 1992, with the bookstore business booming, Kmart purchased Borders and created the Borders-Walden Group. But book profits proved not to be as robust as anticipated and Kmart was having its retail troubles so, in 1995, they divested themselves of the chain of bookstores, spinning off the Borders Group with an initial public offering.
The Borders Group expanded internationally beginning with a store in Singapore 1997, then opening more than 40 stores in Europe, Asia, and Australia/New Zealand and buying a 35-store chain called, appropriately, Books.
Online Bookselling Threatens Borders Business Model
As it became clear that online book retailing, begun by Amazon.com, was rapidly and dramatically changing the bookselling business, Borders created their online presence. But after their initial e-retail efforts resulted in short-term losses for investors, in what was in retrospect a short-sighted move, Borders scrapped its website.
Due to less-than-expected profits overall, some of the bookseller's private equity investors agitated about poor decisions and poor management and in 2001 DiRomualdo was replaced as CEO.