Borders for sale?

Borders bookstore may be on the market due to heavy competition not only from Barnes & Noble but from wholesale clubs, Target and Wal-Mart.

Unable to Compete, Borders May Sell Chain

By David Runk
Associated Press

Borders said yesterday that it may put itself up for sale, and rival Barnes & Noble said its fourth-quarter profit dropped 9 percent as the industry struggles with intense competition from discounters.

Shares in Borders tumbled as the nation’s second-largest bookseller said that it was considering options, including the sale of the company or certain divisions, and that it had lined up $42.5 million in financing to help keep it running through the year.

Despite its earnings slide, Barnes & Noble boosted its dividends and surprised Wall Street with predictions of a profitable first quarter. Analysts said Barnes & Noble, the nation’s largest bookseller, would be the most likely suitor for Borders.

Both big bookstore chains have deepened discounts for their members, as shoppers are even more focused on low prices for discretionary items as they pay higher prices for gas and food.

Analyst Michael Norris at the market research firm Simba Information said customers are increasingly turning to wholesale clubs and other discounters like Target and Wal-Mart for books and other merchandise.

“This is going to be a really tough year” for booksellers, Norris said.

I love going to Borders and Barnes & Noble, but I would hate for Borders to go out of business. I’ve been a Borders shopper much longer than Barnes & Noble. Prince Georges County didn’t get a Barnes & Noble until a few years ago and that was at Bowie Town Center. Before that one opened I would go to the Barnes & Noble at Annapolis Harbour Center.

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